Asian stocks close mixed; tech shares bounce after Apple earnings beat forecasts

Asian stock markets ended mixed on Wednesday, with technology shares gaining after Apple earnings and as investors digested Asia corporate results.

Japan’s Nikkei 225 gained 0.47 percent, or 94.25 points, to close at 20,080.04. Across the Korean strait, South Korea’s Kospi edged up 0.19 percent, or 4.67 points, to end at 2,427.63, boosted by gains in several major tech names.

In Australia, the S&P/ASX 200 declined 0.49 percent, or 28.172 points, to finish the session at 5,744.200. Moderate gains in the industrials sub-index were offset by falls in the energy, materials and financials sub-indexes.

Hong Kong’s Hang Seng Index added 0.3 percent by 3:23 p.m. HK/SIN. On the mainland, the Shanghai Composite reversed gains made earlier in the session to close down 1.2 percent, or 6.6229 points, at 3,286.0154, while the Shenzhen Composite slipped 0.699 percent, or 13.1511 points, to end at 1,869.3168.

Shares of Apple-suppliers received a boost from the release of Apple’s earnings Tuesday. The tech giant beat on the top and bottom lines after selling a higher-than-expected 41 million iPhones in the quarter. Shares of semiconductor maker SK Hynix jumped 3.82 percent, LG Display rose 1.75 percent and LG Innotek soared 10.37 percent by the end of the session.

Stocks of Taiwan’s Apple suppliers also bounced. Camera lens supplier Largan Precision rose 4.82 percent, iPhone assembler Hon Hai advanced 1.72 percent and Taiwan Semiconductor (TSMC) was up 1.89 percent.

Hong Kong-listed Macau gaming stocks were also in focus after the Asian gaming hub said gross gaming revenues (GGR) rose 29 percent on-year in July, Reuters reported.

The growth in GGR topped Nomura estimates of 28 percent growth on-year, but fell below more bullish forecasts of a 30 percent rise, Nomura analysts Harry C. Curtis, Daniel Adam, Brian H. Dobson and Ariane Ordoobadi said in an Aug. 1 note. Growth in GGR is expected to decelerate through year-end, the analysts added.

The sector traded lower, with SJM Holdings leading the losses after announcing a 12.9 percent fall in profit in its first half. SJM’s stock was down 6.56 percent. Other players in the space were also pressured: Melco International Development slid 2.07 percent and Wynn Macau was off 1.77 percent by 3:19 p.m. HK/SIN.

Other market movers included Japan’s Honda and Sony. Both companies reported first-quarter results after the market close Tuesday, with Honda topping earnings expectations and Sony announcing record profit. Honda shares soared 3.49 percent and Sony declined 1.93 percent.

In the U.S., the core personal consumption expenditure (PCE) price index for June – which is watched by the Federal Reserve as an estimate of inflation — rose 1.5 percent on-year, Reuters said. The PCE price index rose 0.1 percent on-month in June, reflecting tepid inflation, Reuters reported.

Meanwhile, U.S. consumer spending rose just 0.1 percent in June, while the ISM manufacturing index stood at 56.3, reflecting an expansion in factory activity.

The greenback was a tad higher after hitting a 15-month low earlier in the session on a mix of political uncertainty stateside and market expectations of further rate hikes from the Fed.

The dollar index, which measures the dollar against a basket of rival currencies, stood at 93.008 at 12:20 p.m. HK/SIN, off a low of 92.777 touched overnight, but off a high of 93.160 earlier in the Wednesday session. Against the yen, the dollar fetched 110.64 yen, off a low of 110.28 yen seen in the overnight session.

A skittish overtone remained in the currency markets, OANDA APAC Head of Trading Stephen Innes said in a Wednesday note.

“The U.S. political crater and lack of fiscal stimulus from Washington will continue to be the primary catalyst for dollar declines,” he said.

In other economic news, a preliminary reading on gross domestic product (GDP) from the European Union reflected that second-quarter economic growth in the euro zone was healthy, Reuters reported. The EU’s estimate reflected GDP rose 0.6 percent in the second quarter, compared with the quarter before, and 2.1 percent on year.

On the earnings front, miner Rio Tinto announced its first-half profit more than doubled on-year due to a rise in iron ore prices, Reuters reported. The company’s first-half profit came in at $3.94 billion, but remained below the $4.19 billion forecast by a Reuters poll.

The miner also announced a $1 billion share buyback, Reuters said. Despite that, Rio Tinto listed in London were down more than 2 percent. Shares listed in Australia closed lower by 0.17 percent before the announcement.

Standard Chartered Bank was also due to report results Wednesday.

In energy news, oil prices extended losses after falling more than two percent in the previous session, but were off session lows. Brent crude fell 0.62 percent to trade at $51.46 a barrel and U.S. West Texas Intermediate crude declined 0.73 percent to trade at $48.80.

Oil had fallen from a two-month high overnight due to concerns over the increase in supply from global oil producers. Output from OPEC producers increased in July despite the bloc’s output cut agreement, a survey from Reuters found on Monday.

In other currency news, the Malaysian ringgit regained some ground to stand at 4.2800 to the dollar at 3:14 p.m. HK/SIN after falling as low as 4.2880 earlier in the session.

The Malaysian currency fell against the dollar overnight. The ringgit traded as low as 4.2840 to the dollar on Tuesday after hitting as high as 4.2735 earlier in the overnight session.

The drop in the ringgit came after Malaysia’s troubled state investment fund 1MDB on Tuesday missed its deadline to make a $600 million payment to Abu Dhabi’s International Petroleum Investment Company.

“So far there has been little panic in the markets since Tuesday’s headline (1MDB) as there are still active buyers of Malay bonds. None the less, the local market is a bit jittery now,” OANDA’s Innes said in a note.

The economic calendar for the Asian trading day was fairly light (all times in HK/SIN):

4:30 p.m.: Hong Kong June retail sales

5:00 p.m.: Reserve Bank of India decision due

Stateside, equities finished the Tuesday session higher as earnings season continued. Of the S&P 500 companies that have reported quarterly results, 72 percent have beat the Street, compared with the typical quarter’s average of 64 percent topping expectations, Thomson Reuters data showed.

Source: CNBC

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