HONG KONG: Tokyo and Shanghai ended higher Thursday but elsewhere Asian markets were mostly muted, tracking a retreat on Wall Street as fears over the progress of US President Donald Trump’s tax cut plans dampened investor sentiment.
Tokyo got a boost from strong corporate earnings, with messaging app Line surging nearly 17 percent as it reported better-than-expected profit.
US stocks closed lower after hitting several records in the last month, with disappointing reports from companies including AT&T and Boeing prompting a sell-off across the market.
In Tokyo a remarkable 16-day run of gains also finally ended Wednesday when the Nikkei closed in negative territory for the first time this month.
But investors remained bullish amid hopes that re-elected Prime Minister Shinzo Abe would press on with his economic agenda.
Shares in Japanese messaging app Line — best known for its cartoon stickers — shot up Thursday in its largest one-day percentage rise since it was first traded on Japan’s premier stock exchange in 2016.
Tokyo ended 0.2 percent higher. Shanghai rose 0.3 percent — its highest level since January 2016 — with liquor shares leading the gains as beverage company Kweichow Moutai jumped 7 percent on a solid profit increase.
The rise came after China’s President Xi Jinping was formally handed a second term in power with no potential successor anointed, raising speculation that he would continue his reign as Communist Party chief beyond 2022.
Elsewhere, Hong Kong slipped 0.4 percent while Seoul fell 0.5 percent.
In Europe, markets held steady in early trade with London, Paris and Frankfurt edging up 0.2 percent as traders awaited the latest interest rate decision from the European Central Bank Thursday.
The ECB is expected to announce a big reduction in its bond-buying stimulus as the eurozone economy picks up and pledge to keep interest rates at historic lows for longer in order to help markets adjust.
– Republican bickering –
In the US, underperforming corporate earnings as well as fears that bickering among Republicans would derail Trump’s tax reform plans weighed on investor sentiment.
Trump has struggled to marshall the 51 votes he needs to pass his proposal, as critics within his own party have lambasted his combative behaviour.
With 52 Republican senators, more than one defection would cripple his reform bid, forcing him to seek support from Democrats who have attacked his plan, calling it a giveaway to the rich.
“Republican infighting once again threatens to derail the vote,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
“Uncertainty over the next Fed Chair has traders double and even triple guessing their best-educated guess. Indeed, the agonising wait is taking its toll on positioning as the longer the process gets drawn out, the more nervous the market becomes”, Innes added.
Oil prices edged lower as Russia’s energy minister Alexander Novak said Moscow would increase its output once again if a deal by producers from OPEC and non-OPEC countries to cut production by 1.8 million barrels per day is not extended.
Saudi Arabia, the world’s top oil exporter, has said it will increase its share of the reduction in November, with the deal currently scheduled to expire at the end of March.
Global oil prices more than halved in 2014 because of oversupply and weak global economic growth.
– Key figures around 0900 GMT –
Tokyo – Nikkei 225: UP 0.2 percent at 21,739.78 (close)
Hong Kong – Hang Seng: DOWN 0.4 percent at 28,202.38 (close)
Shanghai – Composite: UP 0.3 percent at 3,407.57 (close)
London – FTSE 100: UP 0.2 percent at 7,464.92
Euro/dollar: DOWN at $1.1809 from $1.1813 at 2100 GMT
Pound/dollar: DOWN at $1.3213 from $1.3257
Dollar/yen: DOWN at 113.68 yen from 113.78 yen
Oil – West Texas Intermediate: DOWN five cents at $52.13 per barrel
Oil – Brent North Sea: DOWN 15 cents at $58.29 per barrel
New York – DOW: DOWN 0.5 percent at 23,329.46 (close)
Source: Brecorder.com
