Asian markets were mixed Friday as investors parsed a deluge of economic data and corporate earnings.
“Elevated trading volumes across Asia Pacific region suggest the rotation out of bonds into stocks in ongoing,” said Michael McCarthy, chief market strategist at CMC Markets.
“Bond yields are higher across the region, continuing the sell-off sparked by better-than-expected GDP numbers in the U.K. (and) some of these proceeds are finding their way into shares,” he said.
Global bond yields received a boost overnight from stronger-than-expected U.K. GDP data and comments from the Bank of Japan Governor Haruhiko Kuroda that it may not increase its quantitative easing program.
During Asia’s trading day, yields on 10-year Treasurys were up 1.861 percent at a five month-high, while the 10-year JGB yield slipped 0.045 percent.
The ASX 200 closed down 0.22 percent, or 11.745 points, at 5,283.8, weighed by declines in its financials subindex, which was down 0.58 percent, along with its REITs subindex which fell 1.09 percent. Losses were partly offset by strength in the energy subindex, which gained 1.66 percent, and the materials sector, up 1.42 percent.
“(The Australian market faces) concerns about the Fed and the U.S. election that seem to be weighing on most share markets,” said Shane Oliver, chief economist at AMP Capital, in a Friday note.
Moreover there has been “a reversal of the huge bond rally that had helped the higher dividend paying Australian share market and in sectors like real estate investment trusts up to mid-year, (along with) a soft patch in consumer spending, and stock specific issues,” he added.
In Japan, the Nikkei 225 finished up 0.63 percent, or 109.99 points, at 17,446.41, despite the weaker economic data released. A weaker yen likely drove the market’s gains.
The dollar/yen pair broke past 105 levels around the time of London Stock Exchange’s close, on the back of a stronger dollar. The currency pair was trading at 105.31 as of 2:30 p.m. HK/SIN, but may struggle to remain above 105, an analyst said.
“USD/JPY may have found its way above 105 but in order for the currency pair to hold onto its gains, Q3 needs to have been a very strong quarter and it is not clear that this was the case,” Kathy Lien, FX strategy managing director at BK Asset Management, said in a Friday note.
Across the Korean strait, the Kospi ended down 0.2 percent, or 4.14 points, at 2,019.98. Hong Kong’s Hang Seng index was down 1.06 percent in Asian afternoon trade.
Mainland Chinese markets also slid after opening positive, the Shanghai composite closed down 0.23 percent, or 7.268 points, at 3,105.08, while the Shenzhen composite finished down 0.777 percent, or 16,071 points, at 2,052.016.
On the corporate news front, shares of Macquarie Group, Australia’s only homegrown investment bank, rose 1.69 percent to 81.76 Australian dollars ($62.06) each after it posted half-year profits of 1.05 billion Australian dollars versus estimates of 999 million Australian dollars.
Meanwhile, ANZ, one of the big four banks in Australia, announced it would take 360 million Australian dollars ($275 million) in one-time charges in the second half. ANZ shares fell 1.71 percent to 27.62 Australian dollars ($20.96) each.
In Singapore, United Overseas Bank (UOB) shares traded 2.16 percent lower at S$18.53 ($13.28) after it reported its third-quarter profit fell 7.87 percent year-on-year to $791 million, hurt by rising bad debt allowances from the oil and gas sector.
UOB CEO Wee Ee Cheong warned in a statement that the bank “expects subdued global economic growth and volatile market conditions in the months ahead.”
Crude oil prices rose in the U.S. session after Gulf members of the Organization of the Petroleum Exporting Countries (OPEC) reaffirmed commitments to Russia that the cartel was willing to cut output by 4 percent, Reuters reported. OPEC members will meet on Friday and Saturday with energy officials from non-member countries.
Crude futures wavered between positive and negative during Asian trade. U.S. crude was up 0.06 percent, after settling up 1.1 percent at $49.72 a barrel in the U.S., while Brent futures were unchanged in Asia, after settling at $50.47 in the previous session.
Asia-based oil majors were mostly higher. Australia’s Santos was up 1.14 percent, while Oil Search rose 2.72 percent and Woodside Petroleum was up 1.36 percent, Japan’s Inpex was up 0.84 percent and Japan Petroleum was up 1.37 percent. China Petroleum was up 0.6 percent, while Petrochina was up 0.14 percent.
The U.S. dollar index, which tracks the greenback against a basket of major currencies, was trading at 98.883.
Data showed that Japan’s September consumer price inflation was down 0.5 percent from a year earlier, the seventh straight month of falling prices, while September household spending also fell 2.1 percent. One bright spot in Japan’s economic news flow on Friday was the pick-up in its September jobless rate which fell to 3 percent, from 3.1 percent in August.
In Australia, the Bureau of Statistics reported that third-quarter producer prices rose 0.3 percent from the previous quarter.
Stateside, the Dow Jones industrial average fell 0.16 percent to end at 18,169.68, and the S&P 500 closed down 0.3 percent at 2,133.04, while the Nasdaq composite finished down 0.65 percent at 5,215.97.