Asia stock markets close mixed; Japanese exporters, banks sell-off

Asia stock markets ended mixed Wednesday, with Japanese shares selling off amid a relatively stronger yen.

The Nikkei 225 closed down 218.53 points, or 1.31 percent, at 16,465.40, while the Topix index slid 18.45 points, or 1.37 percent, to 1,330.77.

The yen climbed as high as 100.23 against the dollar on Wednesday morning, after easing to levels near 100.91 on Tuesday afternoon Asia time. As of 3:35 p.m. HK/SIN, the yen traded at 100.71.

“A top heavy tone for the dollar/yen may continue to prevail, given little discretionary resilience being attached to the dollar, while the potential for investor nervousness may continue to lurk in the background,” said Emmanuel Ng from Singapore’s OCBC Bank in a morning note.

The relatively stronger yen sent export stocks in Japan lower, with automakers Toyota closing down 2.36, Nissan off 2.58 percent and Honda down 1.82 percent. Among other exporters, Sony fell 0.30 percent and Mitsubishi Electric was down 1.58 percent. Sharp bucked the downward trend to trade up 1.54 percent.

A stronger yen is a negative for exporters as it eats into their overseas profits when converted into local currency.

Japanese banking shares also sold off sharply, with Mitsubishi UFJ falling 3.23 percent, SMFG down 4.08 percent and Mizuho Financial down 3.87 percent.

Earlier this week, BOJ Governor, Haruhiko Kuroda, told business leaders in Osaka that the central bank was prepared to use every policy tool available to achieve its 2 percent inflation target, which included cutting the deposit rate further into negative territory.

Negative interest rates affect the profit margins of banks.

Australia’s ASX 200 closed up 6.50 points, or 0.12 percent, at 5,412.40, with the heavily weighted financial sector finishing nearly flat. The energy sector, however, slipped 1.24 percent, while the gold sector fell 2.12 percent.

In South Korea, the Kospi finished down 9.76 points, or 0.47 percent, at 2,053.06. In Hong Kong, the Hang Seng index fell 0.12 percent by late-afternoon trade. Mainland Chinese shares also ended lower, with the Shanghai composite closing down 10.04 points, or 0.34 percent, at 2,988.12, while the Shenzhen composite was down 2.96 points, or 0.15 percent, at 1,978.30.

In the currency market, the dollar index, which measures the greenback against a basket of currencies, traded at 95.623, which was a touch higher than its last close of 95.435, but was still down from levels above 96.00 in the previous week.

OCBC Bank’s Ng added Fed-centric news flow and data might influence the dollar’s movement during U.S. hours. “In the interim, markets may continue to sit against the dollar, while favoring risk-related plays,” he said.

The Australian dollar traded at $0.7678 in the late afternoon, climbing from levels below $0.76 early last week.

In company news, shares of Postal Savings Bank of China (PSBC) had a lackluster debut in Hong Kong, trading on par with its IPO price of 4.76 Hong Kong dollars. The Chinese state-owned lender raised $7.4 billion in the world’s biggest initial public offering in two years and priced the deal near the bottom of its marketing range, reported Reuters.

Oil prices slipped during U.S. hours on Tuesday, after major oil producers Saudi Arabia and Iran left little hope that producers would reach a deal to tackle the global supply glut during an informal meeting on the sidelines of an energy conference in Algeria.

“Iran is in a very strong bargaining position given that the lifting of sanctions has outweighed the effects of the ongoing oil price weakness, while Saudi Arabia’s fiscal situation continues to deteriorate,” Angus Nicholson, a market analyst at spreadbettor IG, said in a morning note.

U.S. crude futures were modestly up 0.16 percent at $44.74 as of 3:34 p.m. HK/SIN on Wednesday, after dropping 2.7 percent in the U.S. session on Tuesday. Global benchmark Brent was up 0.28 percent at $46.10, after falling 2.9 percent overnight.

The session in Asia followed a rise in U.S. stocks, helped by what was widely seen by market-watchers as a stronger performance from Democratic candidate Hillary Clinton against Republican hopeful Donald Trump at the first U.S. presidential debate.

A beat on the U.S. Consumer Confidence Index, which hit 104.1 in September and was notably higher than the 99.0 print economists expected, also underpinned sentiment stateside.

The Dow Jones industrial average rose 133.47 points, or 0.74 percent, to close at 18,228.30. The S&P 500 index gained 13.83 points, or 0.64 percent, to end at 2,159.93, while the Nasdaq advanced 48.22 points, or 0.92 percent, to close at 5,305.71.

Source: CNBC