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Asian indexes close mixed as Chinese stocks stumble

  • Asian shares closed mixed
  • Chinese stocks took a tumble in early trade
  • Political developments in Spain weighed on the euro
  • HSBC announced third-quarter earnings rose 448 percent
  • Oil prices traded near two-year highs

Asian shares closed mixed on Monday as investors digested quarterly results from regional corporates. Meanwhile, political developments in Spain continued to weigh on the euro.

Markets on the move

The Nikkei 225 erased early losses to close 0.01 percent above the flat line at 22,011.67 as trading houses and financial stocks declined. Tech shares were mixed: Sharp rose 0.83 percent, but Yahoo Japan closed down 4.7 percent.

Japan retail sales for September increased 2.2 percent compared with one year ago, government data showed. That came in a touch below the 2.5 percent median forecast, Reuters said. Meanwhile, the Bank of Japan began its two-day meeting on Monday.

Across the Korean Strait, the Kospi tacked on 0.21 percent to finish the session at 2,501.93 as tech and oil stocks notched gains: SK Hynix closed up 1.79 percent and petroleum refinery company S-Oil rose 0.39 percent. Shares of Samsung Electronics climbed 1.81 percent ahead of the company's expected Tuesday earnings release in which it is forecast to announce record quarterly profit.

Early market movers also included a steep fall in the shares of Daewoo Shipbuilding and Marine Engineering which had just resumed trade on Monday following a lengthy suspension. Daewoo stock closed down 13.39 percent after plunging more than 25 percent in early trade.

Down Under, the S&P/ASX 200 rose 0.27 percent to end at 5,919.079. The index had closed lower in the last session after the coalition government lost its parliamentary majority after Australia's deputy prime minister was disqualified due to his dual citizenship status.

Energy plays closed higher in the session as oil prices held onto Friday's gains: Santos jumped 3.68 percent and Woodside closed up 1.34 percent.

Hong Kong's Hang Seng Index was off 0.11 percent by 3:01 p.m. HK/SIN following a strong earnings report from HSBC, which announced Monday that its third-quarter pre-tax profit jumped 448 percent compared to a year ago. The bank's pre-tax profit for the period stood at $4.62 billion, compared to the $843 million seen last year. Shares of the bank were traded higher by 0.91 percent at 3:01 p.m. HK/SIN.

Mainland markets stumbled, but closed off session lows: The Shanghai Composite fell 0.77 percent to close at 3,390.5887 and the Shenzhen Composite sank 1.731 percent to end at 1,988.4808. Experts variously blamed the fall on a slide in the Chinese bond market as well as consolidation on the part of stock traders.

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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Shares of Apple manufacturers in the region also got a boost following news that pre-orders for the tech giant's new iPhone X have been robust. Taiwan's Largan Precision and Hon Hai Precision Industry closed up 3.15 percent and 1.36 percent, respectively.

MSCI's broad index of Asia Pacific shares excluding Japan was higher by 0.37 percent by 3:03 p.m. HK/SIN.

Stocks on Wall Street closed higher on Friday, with the Nasdaq composite advancing 144.489 points in the session on strong quarterly earnings reports from big tech companies. The tech-heavy Nasdaq closed up 2.2 percent at 6,701.263.

The lead up

Markets have for days been keeping an eye on news about the next Federal Reserve chair. President Donald Trump reportedly favors nominating Federal Reserve Governor Jerome "Jay" Powell when current Chair Janet Yellen's term comes to an end next February. Trump is expected to reveal his decision this week.

Meanwhile, the U.S. economy grew more quickly than expected in the third quarter. Data released Friday showed gross domestic product rose 3 percent, above the 2.5 percent forecast in a Reuters poll.

The dollar index, which tracks the U.S. currency against a basket of six currencies, was slightly softer at 94.770. Against the yen, the dollar was little changed at 113.67.

Elsewhere, the Spanish government dismissed Catalonia's parliament after it declared the region's independence on Friday. Spanish Prime Minister Mariano Rajoy announced regional elections would take place on Dec. 21.

On Sunday, hundreds of thousands of Catalans protested in Barcelona in support of Spanish unity.

The common currency was steady at $1.1615 at 2:45 p.m. HK/SIN after falling as low as $1.1573 in the Friday session. The euro had initially gained after Friday reports on Trump's Fed chair deliberations, but later gave up those gains during the session following news out of Spain. The European Central Bank's policy verdict last Thursday to extend its bond-buying program also weighed on the currency.

Corporate news

Chinese automaker BYD said on Sunday that the company's profit was likely to decline by up to a fifth, Reuters reported. Competition is expected to increase in the electric and hybrid segment in which the company has heavily invested. BYD shares traded in Hong Kong were down 2.96 percent by 2:49 p.m. HK/SIN. Other automakers traded in Hong Kong also trended lower.

Kobe Steel, currently embroiled in a data falsification scandal, said Monday it would be withdrawing its full-year net income estimate. The steelmaker also said it would be forgoing an interim dividend for the first half of the year. Shares of the company closed up 2.22 percent.

Japan's Komatsu on Friday raised its projected full-year profit estimate to 216 billion yen ($1.9 billion) — compared to its earlier forecast of 156 billion yen. The construction equipment company said sales in China and Indonesia had surpassed forecasts. Komatsu shares closed up 3.45 percent after earlier touching a 10-year high in the session.

The commodities trade

Oil prices were steady after rising more than 2 percent on Friday when Saudi Arabia and Russia announced they supported extending an OPEC-led agreement to cut production.

Brent crude advanced 0.12 percent to trade at $60.51 a barrel — around their highest levels since July 2015. U.S. crude futures rose 0.11 percent to trade at $53.97.

— CNBC's Yen Nee Lee contributed to this report.