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Most Asian indexes advance, but China markets ease

Asian indexes traded mostly higher on Thursday after stocks in the region sold off earlier this week. The moves also followed moderate gains on Wall Street following the Federal Reserve’s decision to keep rates unchanged.

The benchmark Nikkei 225 index surged 1.23 percent, as investors looked to snap a six-day losing streak. Energy-related stocks were higher as oil prices recovered: Inpex rose 2.36 percent and JXTG Holdings gained 2.97 percent.

Nintendo shares reversed gains to decline 1.48 percent after the company on Wednesday announced third-quarter profit rose 261 percent to 116.5 billion yen ($1.07 billion), beating forecasts. The company said earlier Thursday it would partner with U.S. studio Illumination to produce a film about Nintendo character Mario.

Other technology sector names were mixed, with SoftBank up 0.99 percent. Automakers, financials and retailers traded in positive territory. Index heavyweight Fast Retailing rose 1.6 percent.

In South Korea, the Kospi edged up 0.13 percent. Technology stocks were mixed, with Samsung Electronics rising 0.16 percent and SK Hynix adding 1.09 percent. The manufacturing space mostly recorded gains, with steelmaker Posco trading higher by 3.68 percent.

Over in Sydney, the S&P/ASX 200 gained 0.9 percent on broad based strength across most sectors. The heavily weighted financials and materials sectors were up 1.17 percent and 1.06 percent, respectively. Oil stocks were also higher after crude continued its recovery. Meanwhile, the Hang Seng Index gave up early gains to ease 0.44 percent. Property developers, which mostly higher in the morning, were mixed in afternoon trade: Country Garden fell 1.43 percent and China Overseas rose 4.46 percent. Financials, technology and energy stocks were mixed.

PC maker Lenovo fell 2.88 percent, underperforming the broader market, after it booked a loss in the third quarter. The company reported a loss of $289 million in the quarter, highlighting a one-off charge of $400 million due to U.S. tax reform.

Mainland indexes also showed declines: The Shanghai composite fell 1.11 percent and the Shenzhen composite tumbled 2.4 percent. The blue chip CSI 300 was lower by 1.1 percent early in the afternoon. Automakers, defense and energy-related stocks were in negative territory in afternoon trade.

 

The fall in Chinese stocks came despite the release of China Caixin manufacturing purchasing managers’ index, which topped expectations. That followed the release of official data on Wednesday, which indicated that January factory activity in the country expanded less than expected in January.

Earlier in the day, the Nikkei/Markit PMI showed that factory activity in South Korea moved into expansion territory in January after coming in below the 50 mark the month prior. Meanwhile, manufacturing activity in Japan grew at its quickest in nearly four years in January, Reuters said.

In other news, India’s budget for the year will be presented at 1:30 p.m. HK/SIN on Thursday.

Markets in Malaysia will be closed for Federal Territory Day.

U.S. stocks closed slightly higher in the last session: The Dow Jones industrial average tacked on 0.28 percent, or 72.5 points, to close at 26,149.39. Other indexes stateside also finished the day with slight gains.

The Federal Reserve announced Wednesday it was holding rates steady, a move that was widely expected. The Federal Open Market Committee also said it expected inflation pressure to pick up as the year progressed.

“To be sure, there were hawkish hints in Yellen’s swan song, with allusion to solid (rather than merely improving) jobs, household spending and business investment,” Mizuho Bank economist Vishnu Varathan wrote in a note.

Still, he added that dollar bulls were not convincingly stirred, partly because “inflation references did not drop the shortfall from [the Fed’s] 2 percent target.”

The dollar index, which tracks the U.S. currency against six rivals, was a touch softer at 89.074, but remained above a low of 88.780 touched overnight.

Against the yen, the greenback extended overnight gains to trade at 109.26. The Japanese currency had slipped in the last session after Japan’s central bank increased its purchases of three to five year Japanese government bonds.

Japan’s Fujifilm will be taking over Xerox in a deal amounting to $6.1 billion, Reuters said. Xerox will be folded into Fujifilm’s existing joint venture with the U.S. company while 10,000 jobs will be cut from Fujifilm’s Fuji Xerox subsidiary. Fujifilm jumped 11.03 percent.

Meanwhile, Fujitsu saw its stock plunge 12.08 percent a day after reporting earnings declined 29.3 percent for the period between April and December. The company also said Wednesday that it would be selling a majority stake in its mobile device business to Polaris Capital Group, Reuters reported.

Source: Reuters & CNBC

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