Asia Markets

Asia markets end mostly higher; Singapore stock market fails to re-open

Hiroshi Watanabe | Getty Images

Asian markets ended mostly higher, with major indexes extending their week-long rallies, while trading in Singapore's securities market was halted due to a system glitch.

Singapore's Straits Times Index was down 0.13 percent in mid-morning trade, before trading was halted.

The Singapore Exchange (SGX) said in a statement the securities market was "put in adjust phase at 1138 hours due to duplicate trade confirmation messages being generated." The stock exchange operator said duplicate trades were not executed and the market remained "orderly."

The SGX had said trading would resume at 2 p.m. HK/SIN, then pushed that back to 4 p.m. HK/SIN, before saying the market will not re-open on Thursday.

Elsewhere, in Australia, the benchmark ASX 200 closed up 23.06 points, or 0.43 percent, at 5,411.60, tacking on a 3.46 percent gain for the week.

Japan's was the standout performer, adding a gain of 8.46 percent for the week, after closing up 154.46 points, or 0.95 percent, at 16,385.89. The Topix closed up 10.90 points, or 0.84 percent, at 1,311.16.

Across the Korean Strait, the Kospi closed up 3.22 points, or 0.16 percent, at 2,008.77, retracing losses of some 0.2 percent. The South Korean benchmark index is up 2.32 percent for the week.

In Hong Kong, the closed up 238.69 points, or 1.12 percent, at 21,561.06. Chinese mainland markets closed mixed, with the composite down 6.77 points, or 0.22 percent, at 3,053.91, while the Shenzhen composite finished up 3.2 points, or 0.16 percent, at 2,044.93.

Overnight, U.S. stocks closed near flat but still managed to make it further into record territory.

Markets have rebounded in recent sessions on the expectation of further stimulus measures in Japan and in the UK. But analysts cautioned that if the expectations are not met by policy actions on the part of governments and central banks, market sentiment may be affected.

"In recent days risk sentiment has been buoyed by the expectation of further stimulus and the lack of new news overnight appears to have taken the wind out the market's sails," Rodrigo Catril, a currency strategist at the National Australia Bank, said in a morning note. He added that unless stimulus expectations were backed up with actions, the risk of disappointment would start to rise.

In Japan, stocks had rebounded and the yen weakened against the dollar amid expectations that a double-bazooka of fiscal and monetary easing was on the cards following Prime Minister Shinzo Abe's landslide victory in upper house elections over the weekend.

But Catril cautioned, "There is still no clarity on the size, type and timing of fiscal and monetary stimulus in Japan."

The dollar/yen currency pair traded at 105.41 on Thursday afternoon local time, compared to levels near 100 touched in the previous week. Japanese export stocks finished mixed, with Toyota shares up 0.36 percent, Honda down 1.39 percent and Sony adding 2.86 percent.

Elsewhere, Nintendo shares were up 15.9 percent to 25,300 yen per share on the back of the limited global launch of the hugely popular mobile game, "Pokemon Go."

In Singapore, government data showed the economy grew at a slower-than-expected pace in the second quarter, according to Reuters. Singapore's Q2 gross domestic product (GDP) expanded 0.8 percent on quarter on an annualized and seasonally adjusted basis, a touch lower than the 0.9 percent predicted by a Reuters poll.

"We remain cautious on Singapore's growth," said Weiwen Ng, an economist at ANZ. "The risk of external weakness spilling into domestic activity...will continue to be a drag on the labor market, muting both growth and inflation outlook."

"Policy support needs to step up to counteract the waning momentum in domestic activity as well as the absence of an external-led demand," said Ng.

The Singapore dollar had a muted reaction to the GDP numbers, briefly touching $1.3479 after the release of the numbers, before falling back to its pre-release levels near $1.3454.

South Korea's central bank kept its base rate on hold at 1.25 percent, sending the Korean won slightly higher. Before the decision, the won traded as low as 1147.45 against the dollar; since the decision, it strengthened as much as 1135.79 before pulling back to 1136.38.

In its policy statement, the Bank of Korea said it will continue to monitor external conditions including the effects of Brexit and monetary policies of major countries, implying it might have to cut rates in the coming months if conditions deteriorate.

Oil prices were higher on Thursday morning Asia time, with global benchmark Brent up 1.3 percent at $46.86 a barrel and U.S. crude futures were up 0.96 percent to $45.18.

In the broader currency market, the dollar traded a touch higher against a basket of currencies; the dollar index was at 96.209 as of 2:16 p.m. HK/SIN, compared to its last close at 96.216.

The British pound traded at $1.3258 on Thursday, lower than the $1.3336 level it reached on Wednesday afternoon Asia time, but up from levels as low as $1.28 last week.

Analysts said markets appeared "pretty comfortable" with Theresa May as the new prime minister of the UK, taking over from David Cameron.

May announced many new cabinet appointments on Wednesday, including key Brexit campaigner and former London Mayor Boris Johnson, who was made foreign secretary, while former foreign secretary Philip Hammond replaced George Osborne as the Chancellor of the Exchequer.

Markets will also focus on the Bank of England's monetary policy decision, due Thursday. A Reuters poll predicted the central bank to cut its bank rate by 25 basis points.

"There is no obvious reason for the MPC to delay," analysts at Societe Generale noted. Previously, BOE governor Mark Carney had said some monetary policy easing would likely be required as the U.K .continued to deal with the ramifications of its decision to quit the European Union.

"We also expect a reopening of the QE programme at a pace of 25 billion pounds per quarter, although this may be held back until the publication of the next inflation report at the August meeting," the Societe Generale analysts added.

But NAB's Catril said that the BOE would ease policy at its July meeting was "not a given," since the central bank might prefer to wait for its next meeting when "more data will be available to assess the impact from the Brexit vote."

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