Asia Markets

Indexes in Asia close in the green as markets digest corporate earnings, Fed decision

Key Points
  • The dollar index was mostly flat after selling off on the FOMC's post-meeting statement released Wednesday
  • South Korea's Samsung Electronics announced record operating profits, but the stock closed lower
  • Several Asian corporates, including Nissan, are expected to announce quarterly results after the market close

Indexes in Asia closed on a positive note on Thursday as a slew of corporate earnings came through and as markets digested the Federal Reserve's decision to leave interest rates unchanged.

Japan's benchmark index reversed earlier losses to rise 0.15 percent, or 29.48 points, and closed at 20,079.64. South Korea's Kospi advanced 0.36 percent, or 8.73 points, to end at 2,443.24.

In Australia, the S&P/ASX 200 gained 0.14 percent, or 8.375 points, to finish at 5,785.

Hong Kong's rose 0.76 percent after opening trade above the 27,000 level. The index was buoyed by gains in several property developer stocks, with Evergrande shares higher by 10.05 percent at 3:03 p.m. HK/SIN.

Mainland markets erased earlier losses to close higher. The edged up 0.05 percent, or 1.6179 points, to close at 3,249.2927 and the Shenzhen Composite surged 1.239 percent, or 22.8351 points to end at 1,865.9582. Shenzhen's tech-focused ChiNext Composite finished the session with 3.459 percent in gains.

Sentiment in the broader region was positive, with the MSCI Asia Pacific ex Japan index near its highest levels since 2007.

Markets digested the Federal Reserve's widely expected decision to hold interest rates steady at the end the Federal Open Market Committee's two-day policy meeting Wednesday.

While the Fed laid the groundwork to soon begin winding down its massive stimulus program, investors honed in on the committee's choice of language on when the move to trim the central bank's balance sheet would kick off.

Normalization of the balance sheet would be implemented "relatively soon," the post meeting statement noted. This was a slight tweak compared to the Fed's use of "this year" after the June meeting.

The dollar sold off in reaction to the statement. The dollar index, which tracks the U.S. note against a basket of six major currencies, traded as low as 93.370 in the overnight session after trading around the 94 handle earlier on Wednesday. The dollar index stood at 93.421 at 12:53 p.m. HK/SIN, off a low of 93.152 hit earlier in the session.

Against the Japanese currency, the greenback was mostly unchanged at 111.10 yen after drifting lower to touch 110.75 earlier in the day.

"The failure to surprise significantly on the hawkish front by the FOMC may continue to engender broad dollar vulnerability going ahead," OCBC currency strategist Emmanuel Ng said in a note.

Yields of the 10-year Treasury bill also declined following the news. The 10-year yield last stood at 2.28 percent after trading at an overnight high of 2.336 percent, according to National Australia Bank.

With the end of the FOMC meeting providing relief for equity markets, earnings remained a core theme in the markets going forward, IG markets strategist Jingyi Pan said in a note.

In corporate news, Samsung Electronics announced record quarterly profits of 14.1 trillion won ($12.68 billion) on Thursday. The amount was roughly in line with the company's own guidance of 14 trillion won and marked a 73 percent rise compared to the year before, Reuters said. Shares of the company finished down 0.08 percent.

Other market movers included Japan's Nintendo, which announced better-than-expected earnings Wednesday. The consumer electronics firm reported operating profits of 16.21 billion yen ($144.95 million) compared to forecasts of 9.52 billion yen. Nintendo shares ended the session up 7.6 percent.

"We feel results dispel concerns about the profitability of the Switch (console) and were positive. We suspect the Switch's profitability has pushed up the highly profitable software download ratio," Citi analyst Minami Munakata said in a Wednesday note after the earnings release.

Singapore-listed commodity trader Noble Group saw its shares fall almost 50 percent after it issued a profit warning. The embattled company said on Wednesday that it was selling its U.S. power business to Mercuria. Noble shares were down 30.43 percent at 2:56 p.m. HK/SIN.

Meanwhile, Oversea-Chinese Banking Corporation reported profits of 1.08 billion Singapore dollars ($796 million) for the second-quarter of the year, a rise of 22 percent compared to a year ago. That was also higher than the S$988 million forecast compiled by Reuters. OCBC shares traded higher by 1.69 percent.

Other corporate earnings are expected on Thursday include Japan's Nissan and Sumitomo Mitsui Trust, and South Korea's LG Electronics.

On the energy front, oil prices took a breather after trading near their highest levels in two months overnight. Brent crude edged down 0.14 percent to trade at $50.90 a barrel and U.S. crude slipped 0.12 percent to trade at $48.69 a barrel.

The rise in oil prices in the previous session came on the back of a larger-than-expected decline in U.S. crude inventories, which was reported Wednesday by the Energy Information Administration.

In economic news, China's statistics bureau reported that profits made by industrial companies in the country increased 19.1 percent on year.

The Australian dollar edged up after the news to trade as high as $0.8065 compared to levels around $0.8015 seen just before. The currency, which stood at $0.8036 at 2:59 p.m. HK/SIN, tends to be sensitive to economic data out of China. Additionally, overnight weakness in the dollar likely contributed to the Australian currency's gains.

On Wall Street, equities were mostly higher at the close on the back of solid corporate results.

— CNBC's Jeff Cox contributed to this report.