Hong Kong stocks rallied to lead most Asian markets Thursday, as energy producers climbed after an increase in oil prices and a modest fuel price cut in China, while South Korean equities got a lift from better-than-expected economic growth data.
Japanese shares were aided by strong advances for banks amid expectations for an economic recovery, but mainland Chinese stocks dropped after a choppy session ahead of a slew of major earnings reports.
Shaking off tentative trading earlier in the day, Hong Kong’s Hang Seng IndexHK:HSI +0.98% climbed 1% and Japan’s Nikkei Stock Average JP:NIK +0.60% gained 0.6%.
The advance in Japan came as the U.S. dollar continued its struggle to breach the 100-yen level, a major psychological milestone, and despite steep post-earnings losses for major firms such as Canon Inc.CAJ -5.07% JP:7751 -6.38% and Nintendo Co. NTDOF +0.91% JP:7974 -5.49% .
IG Markets strategist Evan Lucas said the dollar’s inability to sail over ¥100 was “adding to concerns that it might not be able to do so, which will slow the meteoric rise the Nikkei has experienced this year.”
Financials were among the best performers in Tokyo, with Sumitomo Mitsui Financial Group Inc. SMFG +0.11% JP:8316 +3.25% climbing 3.3% and Mitsubishi UFJ Financial Group Inc. MTU -1.21% JP:8306 +2.17% rising 2.2%.
Shares of Daiichi Sankyo Co. JP:4568 +1.69% DSKYF +0.54% rose 1.7% after the Nikkei business daily tipped a 10% increase in the drug maker’s operating profit for the current year.
Canon sank 6.4% after reporting a year-on-year drop in its first quarter profit.
Nintendo tumbled 5.5% after the videogame firm swung to a quarterly profit, but missed analyst estimates.
The advance precedes Friday’s policy decision from the Bank of Japan, with economists expecting no major changes to be announced after the central bank unveiled a major monetary stimulus at its previous meeting.
Meanwhile, China’s Shanghai Composite CN:000001 -0.86% ended 0.9% lower, losing a battle to edge higher in the morning session.
The Australian markets were closed for a holiday.
Taiwan’s Taiex XX:Y9999 -0.02% ended flat, while the Kospi KR:SEU +0.84% climbed 0.8% in Seoul after data showing South Korea’s gross domestic product increased 0.9% during the January-to-March period. The increase was three times the growth seen in the preceding quarter, and higher than expectations for a 0.7% expansion.
The region’s performance came after the S&P 500 Index SPX +0.0006% ended marginally higher on Wall Street overnight in spite of some downbeat earnings results and disappointing U.S. data on durable goods, while the Dow Jones Industrial Average DJIA -0.29% declined.
Gains in Hong Kong were led by the energy sector, with PetroChina Co.PTR +0.84% HK:857 +1.36% and Sinopec — formally known as China Petroleum & Chemical Corp. SNP +1.13% HK:386 +2.03% — climbing 1.4% and 2%, respectively.
Cnooc Ltd. CE -0.21% HK:883 +2.85% climbed 2.9%, aided by higher oil prices.
The gains came after Beijing lowered the administered prices of gasoline and diesel in China with effect from Thursday. Dow Jones Newswires calculations put the price cuts at 4.2%-4.7%, less than the 5.9% drop in the value of China’s crude-oil basket since March 27, when fuel prices were last cut.
In Shanghai trade, Sinopec CN:600028 +0.59% gained 0.6%, while PetroChinaCN:601857 +0.12% edged up 0.1%.
Shares of several companies that were due to report results later in the day contributed to the choppy trade in Shanghai and Hong Kong.
Among them, Bank of China Ltd. BACHY +0.80% HK:3988 +0.57% rose 0.6%, Cosco Pacific Ltd. CSPKY +13.59% HK:1199 +0.57% added 0.6%, and China Unicom Hong Kong Ltd.CHU +1.16% HK:762 -0.18% slipped 0.2% in Hong Kong.
In Shanghai, China Life Insurance Co. LFC +0.79% CN:601628 -1.70% fell 1.7% and Yanzhou Coal Mining Co. YZC +0.89% CN:600188 -1.70% lost 1.7% ahead of their respective financial reports.
Shipbuilding, automobile and other industrial stocks advanced in Seoul, with Samsung Heavy Industries Co. KR:010140 +2.70% gaining 27%, Hyundai Steel Co. KR:004020 +4.29% rising 4.3%, and Kia Motors Corp. KIMTF -1.81% KR:000270 +4.37% advancing 4.4%.
But financial stocks declined as investors digested Thursday’s economic growth data; shares of KB Financial Group Inc. KB -0.09% KR:105560 -0.70% lost 0.7%, and Hana Financial Group Inc. KR:086790 -0.53% fell 0.5%.
Capital Economics’ Asia economist Gareth Leather said that while a robust growth in exports spurred the South Korean economy in the first quarter, that recovery was unlikely to be sustained amid tepid overseas demand and the competitive disadvantage from a weakened Japanese yen.
“With inflation set to remain low, further monetary-policy loosening is expected later this year,” Leather said.