Asian shares were mixed in the afternoon despite an apparent improvement in market risk sentiment after British Prime Minister Theresa May said she had obtained enough support for her proposed Brexit deal to move forward.
In Hong Kong, the Hang Seng index rose 0.42 percent by the end of the morning session. Shares of Tencent rose 3.75 percent on the back of a better-than-expected earnings report for the third quarter.
“I think the financial performance of Tencent has surprised the market a little bit. In (particular), its mobile gaming business is actually doing better than what we have expected as well,” Ronald Wan, non-executive chairman at Partners Financial Holdings, told CNBC’s “Street Signs” on Thursday.
Wan did, however, voice caution over the outlook for the Chinese tech giant. He said much of the gains achieved in the third quarter were “one-off capital market transaction(s)” and also attributed the gaming business’ strong performance to the launch of many mini-games.
“I think in (the) fourth quarter and even till next year, the company is still subject to a lot of uncertainty,” he added. “I think the price, you know, increment today may not be sustainable so I think investors should be cautious about that.”
The mainland China markets, which have been closely watched as a result of Beijing’s ongoing trade spat with Washington, saw gains from the morning session as well. The Shanghai composite advanced 0.69 percent and the Shenzhen composite gained 0.474 percent.
Away from the Greater China region, however, the picture appeared cloudier.
Japan’s Nikkei 225 slipped 0.63 percent in afternoon trade while the Topix index saw losses of 0.58 percent, as shares of conglomerate SoftBank fell around 3.2 percent.
In Australia, the benchmark ASX 200 lost its earlier gains and fell 0.4 percent as most sectors reversed course, with materials shedding 0.3 percent.
The heavily weighted financial subindex declined 0.53 percent as Australia’s so-called Big Four banks fell. Shares of Australia and New Zealand Banking Group slipped 0.47 percent, Commonwealth Bank of Australia shed 1.03 percent, Westpac fell 0.96 percent and National Australia Bank declined by 0.25 percent.
Meanwhile, South Korea’s Kospi also shed its earlier gains to slip 0.14 percent in afternoon trade.
May gets support for Brexit deal
Theresa May said on Wednesday she had obtained enough support for her proposed Brexit deal to move forward.
“I firmly believe that the draft withdrawal agreement was the best that could be negotiated,” May told reporters in London. “The choices before us were difficult … but the collective decision by Cabinet was that the government should agree the draft withdrawal agreement and the outlying political declaration.”
“This is a decisive step which enables us to move on and finalize the deal in the days ahead,” May added.
Following her announcement, the British pound rebounded against the greenback. On Thursday afternoon during Asian hours, Sterling traded at $1.3008 after touching an earlier high of $1.3012.
Some market watchers said that the uncertainty surrounding a deal continued to weigh on risk sentiment.
Parliamentary approval for the Brexit draft agreement is still in “considerable doubt,” according to Ray Attrill, head of foreign-exchange strategy at the National Australia Bank.
“We still can’t say with any confidence whether this deal, no deal, or indeed a second referendum, is now the most probable outcome to this ongoing saga,” he said in a morning note.
Fed ‘can and will move at any meeting’
U.S. Federal Reserve Chairman Jerome Powell on Wednesday expressed confidence in U.S. economic strength and said that markets will have to get used to the idea that the central bank could raise rates at any time starting in 2019.
During a question-and-answer session in Dallas, Powell conceded that the global economy is not growing at the same pace it was last year. But he said overall the domestic picture looks good. He described the global picture as a “gradual chipping away” at the pace of growth but said it is “not a terrible slowdown.”
“I’m very happy about the state of the economy now,” he said in an interview with Dallas Fed President Robert Kaplan. “Our policy is part of the reason why our economy is in such a good place right now.”
“Over time, folks will get used to the idea that we can and will move at any meeting,” he added.
Trade concerns weigh on Wall Street
In overnight market action on Wall Street, the S&P 500 slipped around 0.76 percent to close at 2,701.58 while the Dow Jones Industrial Average declined by 205.99 points to finish the trading day at 25,080.50. The Nasdaq Composite also saw declines of 0.9 percent to close at about 7,136.39.
Market sentiment was also hurt by comments from Rep. Bill Pascrell, D-NJ. In an interview with Bloomberg News, Pascrell said the updated trade deal between the U.S., Canada and Mexico needs to be changed before it can pass through Congress.
There needs “to be not only changes in the legislation but more enforcement,” said Pascrell, who is in line to be the head of the House Ways and Means subcommittee on trade.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.840 after seeing an earlier high around the 97 handle.
The Japanese yen traded at 113.46 against the dollar after seeing lows above 113.9 yesterday. The Australian dollar was at $0.7272, climbing from lows around $0.7226.