ASIA MARKETS: Asian Stock Markets Go Their Separate Ways Before Lunar New Year Holiday
By Kenan Machado
Samsung helps lift Kospi; Nikkei declines as yen rallies
Asia-Pacific equity markets on Wednesday broke away from their recent lockstep trading, as the global stock rout over the past two weeks abated and local factors took center stage.
U.S. benchmarks rose modestly Tuesday after fresh declines in most of Europe. The S&P 500's trading range, which was within the levels the index moved on Monday, indicates "overall caution" among investors, said Ric Spooner, chief market strategist at CMC Markets.
In Japan, the Nikkei Stock Average lost 0.4% after a day of volatile trade and set another four-month closing low while falling for the 12th session in 15.
Japanese stocks started the day modestly higher but then weakened as the yen rallied and hit a 15-month high against the dollar at around Yen106.85. That pushed the Nikkei down as much as 1.4% but in afternoon action the decline was fully erased as the dollar pushed back up to Yen107.25.
In Hong Kong, the Hang Seng index surged 2.3% and South Korea's Kospi rose 1.1%.
The Kospi was helped by a 3.1% jump in Samsung Electronics (>> Samsung Electronics Co Ltd) . That put the electronic giant's gains for the week at 9.6%, which erased most of the month's decline. Markets there are closed for the rest of the week for the Lunar New Year holiday.
In Hong Kong, index heavyweight Tencent Holdings (>> Tencent Holdings Ltd) has gained 6.4% this week, nearly halving its February pullback.
Chinese equities reversed modest morning declines after two days of strong gains ahead of the holidays. China's markets will be closed from Thursday until Feb. 22.
Asian markets could have been affected by "some prepositioning trades" ahead of the January reading on U.S. consumer inflation data on Wednesday, said Chris Weston, chief market strategist at IG Markets. Ten-year Treasury yields were recently around 2.82%, versus 2.837% in late New York trading.
The dollar has eased to its lowest level in more than a week, weighed by worries over whether the U.S. economy could maintain a 3% growth trend, said Masashi Murata, vice president for global currency strategy at Brown Brothers Harriman in Tokyo.
Local factors also weighed on stock benchmarks in New Zealand and Australia.
The NZX-50 closed down 0.8% as Fletcher Building (>> Fletcher Building Limited) slumped 9.3% to a two-year low after it revealed additional losses at its building-and-interiors division. Trade in the company's shares were halted for nearly a week after Fletcher said Thursday it expected more red ink for the segment.
Australia's S&P/ASX 200 eased 0.3%, reversing some of Tuesday's rebound. Commonwealth Bank (>> Commonwealth Bank of Australia), the country's biggest lender, started trading ex-dividend Wednesday, reflecting the company's upcoming payout to shareholders.