Shanghai Comp, Nikkei outperform lackluster Asia

Equity markets in Shanghai and Japan eked out marginal gains to hover close to fresh multi-year highs on Wednesday, while other bourses in the region stumbled following an unimpressive lead from Wall Street overnight.

The U.S. major indexes finished 1 percent lower each amid renewed strength in the U.S. dollar and some upbeat data that could bolster the case for a quicker-than-expected rate hike. Wall Street reopened for its first trading day of the week after being closed for Monday's Memorial Day.

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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Nikkei adds 0.2%

Japan's benchmark Nikkei 225 extended gains into a ninth consecutive session to finish at a fresh 15-year high of 20,472. However, the index was hamstrung all day by the dollar-yen, which hovered near the currency pair's highest trading level since July 2007.

Export-oriented stocks were mostly higher, thanks to a weaker currency; Canon and Toyota Motor elevated 1.6 and 0.5 percent, respectively, but Sony retreated 2 percent ahead of CEO Kazuo Hirai's speech at the company's "IR Day."

Oil-related counters took a hit from a 3 percent drop in crude oil prices overnight; Inpex was among the biggest laggards with a 1.1 percent decline, while Showa Shell inched down 0.3 percent.

Fujitec, which was in the news for creating a joint venture with a company in Sri Lanka, closed up 2.5 percent.

Meanwhile, minutes from the last Bank of Japan meeting revealed that board members remain concerned about the central bank's 2 percent inflation goal, even though they expect private consumption to stay resilient as incomes are improving.

Mainland markets mixed

After wavering between gains and losses earlier in the day, China's key Shanghai Composite regained some positive momentum to close up 0.6 percent after data showed the country's industrial sector profits posted their first annual rise since last September.

The Shanghai bourse has seen robust gains as of late on the back of positive news such as the launch of a mutual fund recognition with Hong Kong, alongside the unveiling of more than 1,000 infrastructure projects worth $318 billion. Year to date, the index has risen 50.95 percent.

However, a slew of A-share initial public offerings (IPOs) coming up may sap risk appetite, according to IG's market strategist Bernard Aw. "We wonder if the strong gains seen early this week will continue on Wednesday given weaker risk sentiment. A clutch of positive news over the past-two days has helped sentiments in the Chinese stock markets but this could be eclipsed by the IPOs slated for June 2-3," he wrote in a note.

Meanwhile, traders also digested news that A-shares will be included in two transitional indexes under index provider FTSE Russell.

In Hong Kong, Galaxy Entertainment, which will open two new resort projects in Macau later today, notched down 1 percent. Warren Buffett-backed BYD traded flat following news that the Chinese automaker plans to use funds raised in a potential private placement to boost battery production capacity and develop new models.

Meanwhile, the broader Hang Seng index traded 0.6 percent lower.

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Kospi sinks 1.7%

South Korea's Kospi index finished at a one-week low after posting its largest single-day fall in nearly 5 months. The Seoul index was also the biggest loser in the region on Wednesday.

Pharmaceuticals were among the hardest hit, with Hyundai Pharmaceutical slumping 14.9 percent. Index heavyweights also came under intense selling pressure; the top two weighted stocks Samsung Electronics and Hyundai Motor lost 3.3 and 1.6 percent, respectively, while steelmaker Poscoclosed down 3.4 percent after it dispelled market rumors that it would sell its trading affiliate Daewoo International Co.

Several corporate news were in focus; Kumho Asiana Group, the parent company of Asiana Airlines, said it will buy Kumho Buslines Co. for 415 billion won ($375.1 million). Shares of the No.2 air carrier in South Korea bounced 0.7 percent.

Outperforming the bourse for the second straight session following Tuesday's merger announcement, Samsung's de facto holding company Cheil Industries and construction affiliate Samsung C&T jumped 2.4 and 3.9 percent, respectively.

ASX loses 0.9%

Australia's S&P ASX 200 index declined amid a broad-based sell-off among its heavyweight components in the resources and banking sectors.

Gold and energy-related counters fell as a rejuvenated greenback took a toll on commodity prices. Alacer Gold and Newcrest Mining closed down 0.7 and 0.3 percent, respectively, as spot gold held near two-week lows in Asian trade. Among energy producers, Liquefied Natural Gas and Oil Search tanked 8.1 and 2.6 percent, respectively.

Fortescue Metals remains in the spotlight following a report by the Australian Financial Review on Tuesday, which said the iron ore miner has held discussions to get investments from Chinese companies. Shares of the world's fourth-biggest iron ore producer receded 2.08 percent, after surging 10.6 percent in the previous session. Big miners BHP Billiton and Rio Tinto also lost nearly 2 percent each.

Insurer Suncorp recouped early losses to inch up 0.15 percent after unveiling a plan to invest A$75 million to optimize its insurance and banking operations.

Indian indices down

India's S&P BSE Sensex and the 50-share Nifty index ended mixed. Among laggards, index heavyweight Tata Motors slumped over 5 percent after missing market expectations with a 56 percent drop in fourth quarter net profit.