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Asia markets end mixed, with ASX, Kospi advancing and Nikkei falling

Asia markets wavered between positive and negative territory on Wednesday, ending mixed despite advances in oil prices and signs of pick-up in China's services sector.

Australia's ASX 200 was up 21.51 points, or 0.44 percent, at 4,945.90, boosted by a 3.19 percent rise in the energy subindex.

Japan's Nikkei 225 was off 17.46 points, or 0.11 percent, at 15,715.36 as the yen retreated from overnight lows to trade near the 110.42 level in the afternoon local time.

Across the Korean Strait, the Kospi closed up 8.58 points, or 0.44 percent, at 1,971.32. Hong Kong's Hang Seng index was nearly flat as of 3:05 p.m. HK/SIN time.

Chinese mainland markets closed mixed, with the Shanghai composite nearly flat at 3,050.72 and the Shenzhen composite adding 10.60 points, or 0.54 percent, to 1,961.70.

The subdued performance followed a global equity sell-off on Tuesday. There was no obvious catalyst for the sell-off, according to a note from Ray Attrill, global co-head of foreign exchange strategy at the National Australia Bank.

"Rather, we'd gauge that stock investors are retreating back into their shells ahead of the U.S. first quarter earnings seasons that kicks off in earnest next Monday," Attrill said.

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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Helping to bolster market sentiment, China's services sector strengthened in March, according to a survey of smaller and medium-sized enterprises released earlier in the day. The Caixin services purchasing managers' index (PMI) for March rose to 52.2, up from February's reading of 51.2. However, employment fell for the first time in over 2.5 years.

Government data, which focuses on larger companies, last week showed China's official services PMI rose to 53.8 in March, from 52.7 in February.

A reading above 50 indicates expansion.

Oil prices advanced during Asian hours, with U.S. crude futures adding 2.54 percent to $36.80 a barrel as of 3:09 p.m. HK/SIN time, while global benchmark Brent futures were higher by 1.53 percent at $38.45.

The advance came after Reuters, citing Kuwait's OPEC governor and two sources, reported that all signs are suggesting the upcoming meeting of oil-producing countries on April 17 in Doha, Qatar, will deliver an agreement to freeze output.

Energy plays were mixed, with shares of Santos adding 3.94 percent, Woodside Petroleum higher by 2.84 percent and mainland shares of Sinopec adding 6.28 percent. Shares of Japan's Inpex, however, gave up gains to close down 0.72 percent.

Down Under, shares of Westpac dropped 1.54 percent, after the Australian Securities and Investments Commission (ASIC) yesterday commenced legal proceedings in the Federal Court in Melbourne against the bank. In a media statement, ASIC said the proceedings against the bank were for "unconscionable conduct and market manipulation in relation to Westpac's involvement in setting the bank bill swap reference rate in the period 6 April 2010 and 6 June 2012."

Men sit at trading terminals displaying share prices at a securities exchange house in Shanghai, China.
Qilai Shen | Bloomberg | Getty Images
Men sit at trading terminals displaying share prices at a securities exchange house in Shanghai, China.

In the currency market, the dollar index, which measures the dollar against a basket of currencies, was up 0.11 percent at 94.73 as of 3:15 p.m. HK/SIN time.

The dollar/yen pair was trading at 110.42 in the afternoon local time, slightly stronger from Tuesday, when the pair fell as low as 109.94. That compares with levels above 112 last week.

Major Japanese exporters ended mixed, with some taking cues from the slight rebound in the dollar/yen. Shares of Toyota were up 0.33 percent, Nissan added 0.95 percent and Honda was up 1.02 percent. Shares of Sony ended down 1.13 percent and heavily weighted Fast Retailing lost 1.19 percent.

A strong yen is usually a negative for exporters as it affects their overseas revenue when converted into local currency.

Kathy Lien, managing director of FX strategy at BK Asset Management, said in a morning note that the stronger the yen gets against the dollar, the greater the problems will be for Japanese companies. "Most Japanese corporations are hedged at 115 so they are bleeding profits at 110 and lower," she said. She expects more "jawboning" from Japanese policymakers in the coming days, with "the possibility of physical intervention if the dollar/yen falls much further."

"It is clear that traders are trying to test the Bank of Japan's limits because U.S. and Japanese data still support gains in the dollar/yen. The U.S. economy is improving (albeit at a slower than anticipated pace) while Japan's economy is weakening," she said.

The Australian dollar was nearly flat against the U.S. dollar at $0.7545 in the evening local time.

The currency hit a Tuesday session low of $0.7508 before finishing at $0.7543, which, Stephen Innes, a senior FX trader at OANDA, said in a note, was due to a combination of "lower commodity price and risk-off sentiment."

The Chinese yuan was flat against the dollar at 6.4762; before market open, the People's Bank of China set the yuan midpoint fix at 6.4754. China's central bank lets the yuan spot rate rise or fall a maximum of 2 percent against the dollar, relative to the official fixing rate.

Major indexes in the U.S. closed lower, with the Dow Jones industrial average down 0.75 percent, the S&P 500 lower by 1.01 percent and the Nasdaq composite off 0.98 percent.

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