Asia stock markets mixed as oil prices extend fall

Asian stock markets were mixed on Thursday, pausing for breath after oil prices extended declines.

Nikkei 225 was unchanged at 17,862.63, recovering from earlier losses of nearly 0.4 percent. The Japanese benchmark index had been up nearly 10 percent since November 9.

As of 2:46 pm HK/SIN, the yen started to weaken against the dollar, tracking 109.29, but had hovered around 108 levels during most of the Japanese trading session earlier.

The Bank of Japan announced it would buy 10-year Japanese government bonds (JGBs) in order to keep yields around zero percent and cap short-term rates. This was the central bank’s first bond operation since September when it adopted a new policy framework targeting 10-year JGB yields.

The Japanese benchmark 10-year bond bid yield had risen to positive territory to as high as 0.031 percent on Wednesday, spurred by the global bond sell-off. On Thursday, the JGB bid yield was at a session high of 0.029 percent.

Japanese banks were lower after the news. Mitsubishi UFJ was down 1.41 percent to 673.2 yen, Mizuho slid 0.55 percent to 197.9 yen, while Sumitomo Mitsui Financial Group tumbled 1.36 percent to 4,133 yen.

Chinese markets finished mixed, with the Shanghai composite closing up 3.62 points, or 0.11 percent, at 3,208.67, while the Shenzhen composite fell 7.98 points, or 0.37 percent, to 2,116.85.

The Kospi closed up 0.05 percent, or 0.9 points, at 1,980.55. The South Korean benchmark index opened one hour later on Thursday, due to the national college entrance examinations.

Hong Kong’s Hang Seng finished down 0.08 percent, or 17.65 points, at 22,262.88.

The ASX 200 bucked the trend to finish up 0.2 percent, or 10.828 points, at 5,338.5 after initial losses of more than 0.3 percent. The benchmark index saw the biggest losses in its energy sub-index, which was down 1.2 percent.

Shares of major Australian oil companies were lower: Santos fell 2.71 percent to A$3.95, Woodside Petroleum lost 1.61 percent to A$29.27 and Oil Search was flat at A$6.79.

CSG tumbled 36.89 percent to A$0.77 per share after the business technology provider lowered its FY2016 earnings before interest, tax, depreciation and amortization (EBITDA) guidance.

Rio Tinto was up 1.14 percent at A$57.59 per share, after news broke that the Australian mining giant sacked two of 10 most senior executives amid an investigation about payments to a consultant to help it secure rights to develop an untapped iron ore reserve in Guinea.

During Asian trade, U.S. crude futures fell 0.35 percent to $45.41 a barrel, while Brent futures shed 0.34 percent to $46.47 a barrel.

Oil prices slipped on Wednesday in the U.S. session, after the U.S. Energy Information Administration said crude inventory climbed by 5.3 million barrels last week, compared to a Reuters poll of analysts that had forecast a 1.5 million barrel-build.

The greenback traded at 100.37 against a basket of currencies as of 2:46 pm HK/SIN. In the U.S. on Wednesday, the dollar touched 100.57, its highest since April 2003.

The Australian dollar was trading at $0.7476 against the greenback by mid-afternoon, compared to levels above $0.75 seen earlier this week.

“The Aussie has been under pressure due to rising U.S. bond yields and the jittery regional EM markets. However, it took little more than a reversal off recent highs on commodity prices to set the wheels in motion for a probe below 0.7500,” said Stephen Innes, senior trader at Oanda, in a note on Thursday.

Major U.S. indexes closed mixed.

The Dow Jones industrial average snapped a seven-day winning streak, finishing down 0.29 percent at 18,86814, while the S&P 500 ended down 0.16 percent at 2,176.94, and the Nasdaq composite closed 0.36 percent higher at 5,294.58.

The three major U.S. indexes have been clocking gains since Donald Trump’s surprise presidential election victory November 8, as markets anticipated the prospect of more growth-oriented policies, including higher infrastructure spending and the deregulation of the financial industry.

In other stock news, BreadTalk Group fell 0.46 percent, after it surged 4.8 percent to S$1.09 per share on Wednesday. The gains spurred a query from the Singapore Exchange (SGX) and after the market close on Wednesday, the Singapore’s iconic bakery company said that it was in talks with several third parties about starting a joint venture to enter a new region.

On the data front, Australia’s jobless rate held steady at three-year low of 5.6 percent in October, but employment rebounded up only by 9,800, compared to a Reuters forecast of a 20,000 gain.

Source: CNBC