Asia Markets

Asia stock markets fall; Samsung shares tumble

Asian markets open lower

Asian markets slipped Wednesday despite higher oil prices, with Samsung Electronics shares falling after the company said it would permanently stop selling its Galaxy Note 7 smartphone.

Samsung stock dropped 0.65 percent, recovering from losses of more than 3.3 percent earlier, to 1,535,000 won ($1366) each, as the market weighed the impact on the South Korean tech giant's overall business.

The Kospi finished up 0.09 percent, or 1.8 points, at 2,033.73, after wavering between negative and positive territory throughout the session.

Shares of major South Korean telecos were mixed; SK Telecom was down 0.23, KT was up 1.11 percent and Lg Uplus fell 1.3 percent.

Australia's ASX 200 closed down 0.09 percent, or 5.202 points, at 5,474.6. The benchmark index was weighed by its energy subindex, which fell 0.93 percent, and its material component, which dropped 1.06 percent.

In Japan, the index closed down 1.09 percent, or 184.76 points, at 16,840, while Hong Kong's shed 0.95 percent in Asian afternoon trade.

Mainland Chinese markets were also lower; the finished 0.2 percent, or 6.121 points, at 3,059.129, while the Shenzhen composite closed up 0.168 percent, or 3.433 points, at 2,047.119.

U.S. crude futures gained 0.28 percent to $50.93 a barrel, above its U.S. settlement price of $50.79, while Brent was up 0.42 percent at $52.62. The global oil benchmark settled at $52.41.

Despite the higher crude prices, shares in Asian oil majors were negative. Australia's Santos was down 2.54 percent, while Oil Search shed 1.96 percent, Japan's Inpex was down 0.45 percent, while South Korea's S-Oil was lower by 3.37 percent and China Petroleum was down 0.8 percent.

Crude prices had slipped during the Tuesday U.S. session from one-year highs, amid rising doubts that the production cut agreement by the Organization of the Petroleum Exporting Countries (OPEC) would help reduce the supply glut.

Is the market already preparing for a rate hike?

Investors will likely look ahead to the release of the Federal Open Market Committee minutes from the September meeting, which are expected to show an unusual division in the rate-setting committee. Three of the FOMC's 10 voting members opposed the final statement released in September, which noted that Fed officials felt it prudent to keep its interest rate target at 0.25 percent to 0.5 percent.

Meanwhile, the dollar index, which measures the greenback against a basket of currencies, traded at 97.604 during Asian trade, its highest level in seven months. And the pound, which had fallen for four straight sessions on fears of a so-called "hard Brexit," was trading up 1.35 percent, at 1.2260 as of 2:25 pm HK/SIN.

"Hard Brexit fears pushed the pound -1.9 percent overnight but Asian bulls have created an early 1.4 percent bounce. The bounce follows reports that UK Prime Minister May has backed down from disallowing a vote on her controversial Brexit plans," Anthony Darvall, chief market strategist at easyMarkets, said in a Wednesday note.

The People's Bank of China set the yuan mid-point fix weaker at 6.7258, compared to the last close at 6.7185. The offshore renminbi also weakened against the dollar, and was trading at 6.7218 as of 2:26 pm HK/SIN.

"USD/CNH broke through a key resistance level [at] 6.70 yesterday. Expectations of the Federal's rate hike by year end probably paved the way for a slow depreciation of Chinese yuan in the near term," Margaret Yang, market analyst at CMC Markets Singapore, said in a Wednesday note, alluding to the dollar/offshore yuan rate.

Next market catalyst

U.S. markets closed sharply lower on renewed uncertainty over the U.S. presidential election, as well as lower crude prices and dollar strength. Weakness at the start of the U.S. earnings season helped weigh on sentiment.

"Investors were shackled, with the corporate health condition in the U.S. and the Fed is thinking of increasing the interest rate," Naeem Aslam, ThinkMarkets' chief market analyst, said.

The composite finished down 1.54 percent at 5,246.79, while the S&P 500 ended down 1.24 percent at 2,136.73, and slipped 1.09 percent to 18,128.66.

India's markets will be shut for the Muharram public holiday.

Down Under, the Melbourne Institute-Westpac Bank survey found that Australian consumer sentiment rose 1.1 percent in October from the previous month.

In Japan, core machinery orders fell by 2.2 percent from the previous month, compared to a Reuters poll that had forecast declines of 5.5 percent. The fall in core orders, which is a highly volatile data series, is an indicator of near-term capital spending.

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