Asian shares edge lower as Trump’s Asia tour gets rolling; SoftBank falls 2.7%

Most major Asian indexes edged down on Monday as investors digested earnings reports and President Donald Trump’s tour of the region got underway.

U.S. stocks had closed higher on Friday despite a mixed jobs report for October as markets focused on strong earnings.

Japan’s Nikkei 225 slid 0.11 percent as markets re-opened for trade after a long weekend. Oil stocks and most automakers notched gains except for Mazda Motor, which declined 3.69 percent on a poorer-than-expected quarterly profit.

Minutes from the Bank of Japan released Monday showed most policymakers thought the central bank should keep its current policy guidelines, Reuters reported.

Across the Korean Strait, the Kospi came under pressure. The index declined 0.76 percent as a fall in blue-chip tech stocks weighed on the broader market: Samsung Electronics erased 1.35 percent and SK Hynix slid 1.54 percent. Cosmetics and oil stocks, however, notched gains.

Down Under, the S&P/ASX was off 0.18 percent, with gains in energy and utilities stocks offset by losses in the heavily-weighted financials sub-index. Australia’s Westpac announced on Monday that its cash earnings rose 3 percent to 8.06 billion Australian dollars ($6.17 billion) for the year ending on September 30.

That was below the 4 percent rise forecast in a Reuters poll. Meanwhile, statutory net profit for the period rose 7 percent to A$7.99 billion ($6.11 billion). Westpac shares lagged other banking stocks to fall 2.31 percent.

Hong Kong’s Hang Seng Index fell 0.92 percent. Mainland markets fared slightly better and traded mixed: The Shanghai Composite was off 0.13 percent and the Shenzhen Composite reversed early losses to climb 0.258 percent.

Asian corporates on Monday’s earnings calendar included Sumitomo and Mitsubishi.

U.S. stocks closed at record levels on Friday, with Apple shares jumping in the session following its earnings beat. The Nasdaq composite surged 0.74 percent, or 49.49 points, to close at a record 6,764.44 on those results.

Data on Friday showed that a total 261,000 jobs were created in the U.S. in October, significantly below the 310,000 figure expected. The unemployment rate for the period, however, came in at 4.1 percent, a shade below the 4.2 percent forecast.

Elsewhere, several Saudi ministers and princes, including prominent investor Prince Alwaleed Bin Talal, were detained over the weekend as part of an anti-corruption probe in the country. Saudi Arabia’s stock market initially fell on Sunday in reaction, but had edged higher by the end of the session.

Also in focus in the region was Trump’s tour of Asia, with Japan the first of the five nations on the itinerary. On his arrival in Japan, Trump warned that “no dictator” ought to “ever underestimate American resolve.” The president will also visit South Korea, China, Vietnam and Philippines during his trip.

In Asia, People’s Bank of China Governor Zhou Xiaochuan said the market ought to play a key role in resource allocation, but that regulation remained vital, Reuters said, citing local media. Zhou had warned in October of the risk of a crash in asset prices resulting from too much optimism.

In other news, merger talks between telcos Sprint and T-Mobile have ceased, the companies announced on Saturday. Japan’s SoftBank, the parent of Sprint, is due to report earnings on Monday. SoftBank stock was down 2.7 percent.

Qatar Airways announced it would be buying around 9.61 percent of Cathay Pacific Airways. Kingboard Chemical said in a filing on the Hong Kong Exchange that it would be disposing of those shares for consideration of 5.16 billion Hong Kong dollars ($661 million). Kingboard Chemical was up 1.15 percent and Cathay shares were down 1.36 percent after falling more than 4 percent earlier in the day.

Elsewhere, DBS Bank said Monday its third-quarter net profit came it at 822 million Singapore dollars ($602 million), well below the S$1.13 billion forecast in a Thomson Reuters I/B/E/S poll. The bank also said its exposure to the oil and gas support services sector stood at S$5.3 billion ($3.8 billion). DBS shares tumbled 1.13 percent.

The dollar broadly held onto gains made in the last session following Friday’s stateside data releases. The dollar index stood at 94.922 at 11:39 a.m. HK/SIN after touching as high at 95.015 on Friday.

Against the yen, the greenback firmed to trade at 114.34, above Friday’s close of 114.06.

Oil prices touched their highest levels in more than two years as markets kept an eye on the developments in Saudi Arabia. Brent crude was up 0.29 percent at $62.25 a barrel and U.S. crude futures tacked on 0.22 percent to trade at $55.76.

While technical indicators showed both contracts were “severely overbought,” geopolitical risk was likely to override those fears in the short term and “maintain the upside bias to crude,” Jeffrey Halley, senior market analyst at OANDA, said in a note.

Source: CNBC