Asia Markets

Asian stocks come under pressure as dollar struggles

Key Points
  • Asian markets ended mostly lower on Friday
  • The dollar was on the back foot against a basket of currencies
  • Sunac China tumbled 9 percent after announcing it would sell $1 billion in new shares
  • HNA Group said it would be repurchasing "some" of its bonds

Asian markets closed mostly lower on Friday after U.S. markets finished in the red on concerns about the future of tax reform stateside.

Japan's Nikkei 225 came under pressure, sliding 0.62 percent, or 141.23, to close at 22,553.22, but was off session lows. Major exporters traded lower as the dollar lost ground against the yen. Toyota closed down 1.83 percent and Honda was 1.02 percent lower. Telcos also declined, with SoftBank losing 2.39 percent and NTT Docomo tumbling 4.6 percent by the end of the day.

Japan's most recent tankan survey released on Friday showed large manufacturers' sentiment had improved for a fifth consecutive quarter, Reuters reported. The score of plus 25 recorded was the highest in 11 years, according to Reuters.

Across the Korean Strait, the Kospi edged up 0.51 percent to end at 2,482.07 after it lost steam and closed lower on Thursday despite rallying more than 1 percent earlier that day. Blue-chips contributed to gains on Friday. Hyundai Motor rose 2.33 percent and Posco closed up 0.91 percent, although heavyweight Samsung Electronics declined 0.86 percent on the day.

Down Under, the S&P/ASX 200 closed 0.24 percent lower at 5,997. Heavily-weighted financials were weaker, while major miners gained: Rio Tinto reversed early losses to climb 1.13 percent and BHP was 0.04 percent higher at the end of the session.

The declined 1.12 percent by 3:10 p.m. HK/SIN as property and banking stocks slid. HSBC Holdings was down 1.13 percent and Evergrande was lower by 3.46 percent by that time. On the mainland, the closed 0.8 percent lower at 3,266.15 and the Shenzhen Composite ended 0.72 percent at 1,901.2, with technology among the worst-performing sectors on the day.

Tax worries in the USA

Investors stateside shifted their attention from the Federal Reserve's recent meeting to new uncertainty about the chances of tax reform.

Sen. Marco Rubio, R-Fla., on Thursday confirmed he opposes the Republican party's current tax plan. Other holdouts include Sen. Mike Lee, R-Utah, who has not yet made a decision on the bill and Sen. Bob Corker, R-Tenn., who had opposed the Senate tax bill but has not signaled where he stands on the joint bill.

Vice President Mike Pence delayed a trip to the Middle East amid uncertainty over passing the bill in the Senate. Pence will be required to break a tie if at least two of the Senate's 52 Republicans oppose the tax bill.

U.S. equities finished lower on Thursday after those doubts were raised, with the Dow Jones industrial average edging down 0.31 percent, or 76.77 points, to close at 24,508.66.

The dollar was on the back foot against a basket of currencies, likely to end the week lower as investors kept an eye on progress made over U.S. tax reform. The dollar index traded at 93.552 at 3:02 p.m. HK/SIN after dipping as low as 93.282 in the last session. That compared with the 93.983 seen at the beginning of the week.

Against the yen, the greenback was little changed at 112.25, edging lower for a third straight session.

Goodbye, net neutrality

Also of note was the Federal Communications Commission's decision to scrap net neutrality regulations. Those rules ensured that telecommunication corporations had to give equal treatment to all internet traffic.

Elsewhere, the European Central Bank kept monetary policy steady on Thursday, but upgraded its growth forecast for the region from 2.2 percent to 2.4 percent this year. The euro was a touch firmer after falling in the previous session, trading at $1.1780 at 3:03 p.m. HK/SIN compared to a low of $1.1769 touched in the previous session.

"While Draghi's message was more hawkish than the market anticipated, the main takeaway is that even though the economy is improving, they have no plans to raise interest rates anytime soon," Kathy Lien, managing director for FX strategy at BK Asset Management, said in a note.

The Bank of England also kept its policy unchanged, a move widely expected by markets. In November, the BOE had raised rates for the first time in nearly a decade from 0.25 percent to 0.5 percent. The pound was firmer, trading at $1.3436.

Sunac China, HNA Group and more

Property developer Sunac China saw its Hong Kong-listed shares plunge 9.35 percent by 3:04 p.m. HK/SIN after it announced it would sell roughly 7.82 billion Hong Kong dollars ($1 billion) of new shares to Sunac International Investment, a wholly owned company of Sunac China Chairman Sun Hongbin. Sunac said it will be using the proceeds from the sale "for the general working capital of the company."

Meanwhile, Chinese conglomerate HNA Group has repurchased some of its bonds, citing "the impact of recent market fluctuations" on bond prices as a reason for doing so. The company did not provide any numbers, but said it intended to repurchase more bonds ahead. Shares of Hong Kong-listed HNA Holding were down 4.11 percent at 3:00 p.m. HK/SIN.

Shares of Hong Kong's Li & Fung jumped 7.84 percent by 3:04 p.m. HK/SIN after the company said it would be divesting its furniture, beauty and sweaters verticals for $1.1 billion. The buyer is an entity linked to Hony Capital, a Chinese private equity firm.

Chinese developer Dalian Wanda Group said in a Thursday statement that its revenue in 2017 was projected to be above 200 billion yuan ($30.2 billion) after an online article suggested the company's cash flow "has obviously been cut off." Wanda said it would be taking legal action over the article, which also suggested the company had ties to a corrupt government official.

— CNBC's Natasha Turak and Jacob Pramuk contributed to this report.