Asia Markets

Asia trades mixed after US tax bill vote gets delayed

Key Points
  • Asia traded mixed after U.S. stocks rallied overnight and the Dow Jones industrial average topped 24,000
  • The dollar retreated against a basket of currencies after news emerged that the U.S. tax vote will be delayed
  • Oil prices are in focus after OPEC and Russia agreed to extend their oil output cut to the end of 2018
Kazuhiro Nogi | AFP | Getty Images

Asia markets were mixed on Friday afternoon, giving up some of the early morning gains. That came despite a positive lead from the U.S. that included the closing above 24,000 for the first time.

Markets on the move

In Australia, the ASX 200 topped 6,000 after the first hour of trade. But the index retreated subsequently to close up 19.9 points, or 0.33 percent, at 5989.8. Major banking stocks finished mixed with shares of ANZ up 0.56 percent, Commonwealth Bank down 0.33 percent and Westpac higher by 0.29 percent.

Japan's retraced early gains of roughly 1 percent to close up 94.07 points, or 0.41 percent, at 22,819.03. The Topix index finished up 4.45 points, or 0.25 percent, at 1,796.53.

Across the Korean Strait, the Kospi closed fractionally lower at 2,475.41.

In Hong Kong, the gave up early gains to trade down 0.17 percent at 3:13 p.m. HK/SIN.

Chinese mainland shares opened with little confidence, but by the afternoon the composite closed near flat. The Shenzhen composite, on the other hand, had eked out a gain of 14.94 points, or 0.78 percent, to close at 1,916.8.

Elsewhere, China's November Caixin manufacturing Purchasing Managers' Index, which focuses on the country's small and mid-sized businesses, came in weaker than expected.

"Global investor sentiments remained into the month-end fueled by hopes of a U.S. tax bill with McCain's backing which sent the Dow past 24,000 amid healthy U.S. economic indicators," analysts at Singapore's OCBC Bank wrote in a morning note.

The momentum from the overnight rally in U.S. equities broke on Friday morning Asia time, following U.S. Senate Republicans delaying a vote on their tax bill after a setback forced them to make changes only hours before a planned final vote.

Overnight, stocks received a boost after Sen. John McCain said he will back the Senate GOP's tax bill, boosting the plan's chances of clearing the Senate by Friday. McCain had been one of the last GOP senators not committed to supporting the proposal.

The current rally in the stock market is driven by earnings, not politics

Dollar rises

Elsewhere, the dollar retreated from an earlier high of 93.056 to trade at 92.963 against a basket of currencies at 3:16 p.m. HK/SIN, following the news of the delay in the tax vote.

Among other currency majors, the Japanese yen traded at 112.64 to the dollar, weakening from an overnight low of 111.71. The relatively weaker yen saw some export stocks gain in Japan — although most came off earlier highs.

Shares of Toyota retreated from gains of roughly 1 percent to close up 0.1 percent, Honda was up 0.83 percent and Mitsubishi Electric rose 0.27 percent. A relatively weaker yen is usually a positive for exporters as it increases their overseas revenue when converted into local currency.

Elsewhere, Sharp shares rose 7.92 percent in afternoon trade, after the company said it received approval from the Tokyo Stock Exchange to return to the exchange's first section on Dec. 7, 2017. Sharp's common shares were reassigned to the second section of the market last year.

The Australian dollar fetched $0.7558, while the euro traded at $1.1917. The British pound rose from levels near $1.33 in the previous week to trade at $1.3531 at 3:18 p.m. HK/SIN.

Oil in focus after OPEC extends output cut

Energy prices were in focus in the Friday session after OPEC and Russia agreed on Thursday to extend their oil output cuts to the end of 2018.

Though the move was expected by many, the oil producers had earlier indicated they could walk from the deal if they felt the market was overheating.

The deal to cut oil output by 1.8 million barrels a day was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

"The world's biggest oil-producing countries believe that a global oversupply of oil is still weighing down oil prices noting that oil in storage — a proxy for the global glut — remains well above historical averages," Rodrigo Catril, a currency strategist at the National Australia Bank, wrote in a morning note.

Energy plays in Australia rose with Santos shares gaining 1.18 percent, Oil Search up 1.99 percent and Woodside Petroleum higher by 1.23 percent. Japan's Inpex was also up 2.77 percent and Japan Petroleum advanced 2.84 percent.

U.S. crude rose 0.44 percent to $57.65 per barrel on Friday afternoon at 3:19 p.m. HK/SIN and global benchmark Brent was up 0.59 percent to $63 per barrel.

— CNBC's Jacob Pramuk and Holly Ellyatt contributed to this report.