Asia Markets

Asian shares close mixed following Wall Street losses; China data falls short

Key Points
  • Asian shares were mixed
  • Samsung reported third-quarter profit almost tripled compared to a year ago
  • China's official manufacturing PMI missed expectations
  • The Bank of Japan kept monetary policy steady
  • Trump is expected to announce his choice for the next Fed Chair on Thursday

Markets in Asia closed mixed on Tuesday as investors in the region digested the release of China's official Purchasing Managers' Index and the Bank of Japan's rates decision. Wall Street had closed lower Monday on news that planned stateside tax cuts could be gradually implemented. Investors

Markets on the move 

Japan's Nikkei 225 pared losses to close flat at 22,011.61. Financial stocks recorded losses of more than 1 percent while tech shares were mixed: Mitsubishi UFJ closed down 2.57 percent, Nomura Holdings tumbled 2.71 percent and Sony rose 2.39 percent.

The Bank of Japan on Tuesday kept its monetary policy steady after a two-day meeting. The central bank said it would maintain the short term interest rate at minus 0.1 percent.

Meanwhile, industrial production in September declined 1.1 percent from a month ago, government data showed. That compared to a median 1.5 percent fall estimated by markets, Reuters said.

Across the Korean Strait, the Kospi rose 0.86 percent to close at 2,523.43. Automakers rallied, but several blue-chip tech names declined: Hyundai Motor closed up 3.21 percent and LG Electronics declined 4.01 percent. Shares of Lotte Shopping surged 7.14 percent on news that South Korea and China would work on thawing relations that grew icy as a result of Seoul's deployment of an anti-missile system.

Of note, Samsung reported its third-quarter profit almost tripled from a year ago to 14.5 trillion won ($12.91 billion), boosted by memory chip income, according to Reuters. Samsung shares reversed early losses to close up 1.92 percent.

The S&P/ASX 200 lost 0.17 percent to end at 5,909.017, with gains in the consumer staples sub-indexes offset by losses in the heavily-weighted financials sub-index.

Hong Kong's was flat at 3:13 p.m. HK/SIN as casino stocks erased early losses to climb higher.

On the mainland, the pared some losses made in the last session to finish the session 0.12 percent higher at 3,394.5033. The Shenzhen Composite rose 0.694 percent to close at 2,002.2838.

China's official manufacturing Purchasing Managers' Index for October came in at 51.6 — missing the 52.0 figure forecast by analysts in a Reuters poll. The official services PMI, meanwhile, came in at 54.3, below the 55.4 seen last month.

While the dips in PMIs could indicate "a moderation" in the fourth-quarter from previous periods, they were "unlikely to change the broad picture of steady growth in 2017," ANZ Senior China Economist Betty Rui Wang said in a note.

U.S. stocks closed lower on Monday following the tax cut reports, with the Dow Jones industrial average fell 85.45 points to end at 23,348.74.

The lead up

Tax cuts were in the spotlight overnight following a Bloomberg report that planned reductions in the corporate tax rate would be gradually implemented. That plan would lower the corporate tax rate by three percentage points each year from the existing 35 percent beginning in 2018.

In response to the latest reports, Press Secretary Sarah Sanders said President Donald Trump's position on corporate taxes had not changed.

Other central banks were also in focus, with the Federal Open Market Committee beginning its own two-day meeting on Tuesday. It is due to make its interest rates decision on Wednesday U.S. time.

Ahead, Trump is expected to announce his choice for the next chair of the Federal Reserve on Thursday. Most in the markets expect Trump to choose Fed Governor Jerome "Jay" Powell for the role. Other candidates that are in the running include Stanford economist John Taylor, current Fed Chair Janet Yellen and former Fed Governor Kevin Warsh.

Also of note was the indictment of former Trump campaign chairman Paul Manafort as part of the ongoing Russian interference probe.

"This story which has popped up again ... could unsettle markets in the run-up to Trump's big [Fed] announcement, tax policy progress and Asia tour," Rob Carnell, Asia head of research at ING, cautioned in a note.

Corporate news

Nintendo on Monday announced it was nearly doubling its full-year profit forecast to 120 billion yen ($1.06 billion) from 65 billion yen. The consumer electronics company also reported quarterly profit of 23.7 billion yen, topping the 19 billion yen expected, Reuters said. Nintendo stock closed 2.17 percent higher.

Shares of Softbank tumbled 4.63 percent by the end of the session following news that talks to combine T-Mobile and Sprint had run into turbulence. Softbank, which owns Sprint, intends to walk away from the talks, Nikkei reported on Monday.

Elsewhere, Glencore announced in a filing that it would be withdrawing the listing of its shares on the Hong Kong Exchange. The withdrawal is expected to come into effect on Jan. 31, 2018, the company said. Shares of the company traded in Hong Kong were up 1.74 percent by 3:16 p.m. HK/SIN.

Watching the dollar 

The dollar index recouped some overnight losses made following the tax cut news to stand at 94.553. Still, that was below levels around the 94.7 handle seen during Asian trade on Monday. Against the Japanese yen, the greenback was stable at 113.11.

The Australian dollar, which had edged down ahead of the release of Chinese data, was little changed on the day. The Aussie dollar traded at $0.7683 at 3:16 p.m. HK/SIN after climbing as high as $0.7698 in the session.

The commodities trade 

Oil prices pared some gains, but Brent oil continued to hold above the $60 mark. Brent crude lost 0.15 percent to traded at $60.81 a barrel. U.S. West Texas Intermediate crude, meanwhile, slid 0.24 percent to $54.02 a barrel — near its highest close since February.

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