Asia Markets

Asian stocks close mixed as oil markets digest Hurricane Harvey impact; euro near 2-1/2 year high

Key Points
  • Fed Chair Janet Yellen and European Central Bank President Mario Draghi gave little away in terms of monetary policy at Jackson Hole
  • The euro traded close to its highest levels since January 2015
  • Oil markets digested the impact of Hurricane Harvey after refineries were shut down due to flooding

Asian indexes came under pressure on Monday after the euro soared following Friday speeches from top central bankers. Oil markets, meanwhile, digested the impact of Hurricane Harvey.

Japan's Nikkei 225 closed mostly unchanged, ending the session off 0.01 percent at 19,449.9. Across the Korean strait, the Kospi slid 0.35 percent, or 8.21 points, to close at 2,370.3 as a sell-off in tech stocks weighed on the broader market.

Down Under, the S&P/ASX 200 was pressured, with the heavily-weighted financials sub-index falling 0.85 percent. The broader index declined 0.59 percent, or 33.961 points, to close at 5,709.9 as reporting season draws to a close this week.

Greater China markets shrugged of the negative trend to climb higher. Hong Kong's pared earlier gains to trade just 0.01 percent above the flat line at 3:18 p.m. HK/SIN. On the mainland, the advanced 0.94 percent, or 31.2930 points, to close at 3,362.8151 and the Shenzhen Composite added 1.394 percent, or 26.6305 points, to finish at 1,936.7606.

Philippine markets were closed for a public holiday.

While Federal Reserve Chair Janet Yellen did not provide any clues on monetary policy outlook in her speech at a central banking meeting in Jackson Hole, she argued that reforms implemented post-financial crisis have "made the system safer." Some market watchers regarded Yellen's comments as being directed at President Donald Trump and his administration.

Like Yellen, European Central Bank President Mario Draghi stayed mum on the future of monetary policy in the euro zone in his Friday speech. However, the ECB chief's lack of comment on the strength of the euro gave a boost to the common currency. The euro fetched as much as $1.1963 — its highest levels since January 2015 — early on Monday, before paring some gains to trade at $1.1937 at 3:12 p.m. HK/SIN.

"The deliberate (and perhaps deliberated) reticence on policy specifics by both Yellen and Draghi did not faze markets that were essentially watching out for road-blocks rather than seeking directions at Jackson Hole," said Mizuho Bank Head of Economics and Strategy Vishnu Varathan in a note.

Following the speeches, the dollar index, which tracks the dollar against a basket of currencies, fell to a low of 92.424 on Friday after trading as high as 93.440. It recovered slightly to last stand at 92.460. The greenback last fetched 109.03 yen, below levels around 109.36 seen last week.

Energy markets digested the impact of Hurricane Harvey on the U.S. Gulf Coast. Shell and Petrobras are among the companies that have closed their refineries in the Houston area due to "severe weather," including heavy rainfall and flooding.

Gasoline futures jumped following the shutdowns, trading higher by 4.66 percent at $1.7443 a gallon at 3:14 p.m. HK/SIN. Meanwhile, Brent crude slipped 0.13 percent to trade at $52.34 a barrel and U.S. crude was 0.77 percent lower at $47.50. Oil had gained around 0.9 percent on Friday ahead of Harvey making landfall.

Potential damage from weather conditions to refining facilities on the Gulf Coast have pushed gasoline prices higher. Correspondingly, oil prices have dipped because of lower demand from those refineries for the crude oil needed to produce gasoline.

"Details of the actual damage still remain sketchy, but what (is) for certain is that there may be meaningful and long term damage to Texas' refining capacity," said OANDA Senior Market Analyst Jeffrey Halley in a Monday note.

Individual market movers that were on the radar included Samsung Electronics. The company's stock, which fell more than 1 percent after Samsung Group's de-facto head Jae Y. Lee was given a five-year prison term Friday, extended losses to close down 1.96 percent. Reuters attributed the drop in Samsung Electronics' share price to foreign selling. Samsung C&T, another Samsung affiliate, tumbled 3.37 percent. Lee's lawyer has filed to appeal against the term meted out last week, Reuter added.

Meanwhile, Evergrande Group saw its stock outperform other Hong Kong-listed property shares ahead of posting interim results for the first half of the year. Evergrande shares jumped 5.84 percent by 3:15 p.m. HK/SIN. The company issued an announcement in July that it was expecting a "substantial increase" in profit.

Shares of Wanda Hotel Development plunged following a Taiwanese media report that Dalian Wanda Chairman Wang Jianlin had been prevented from leaving the country. Dalian Wanda said in statement on its website that the rumor was "completely unfounded." Wanda Hotel shares were last down 8.09 percent.

Brokerages listed on mainland China also rallied on Monday: Huatai Securities closed up 9.73 percent, China Merchants Securities soared 7.38 percent and Citic Securities advanced 6.18 percent.

Stateside, equities closed mostly higher on Friday on renewed investor expectations for proposed tax reforms, with the Dow Jones industrial average rising 0.14 percent, or 30.27 points, to close at 21,813.67.