Asia Markets

Asian stocks close lower after giving up slight gains; dollar edges down

Key Points
  • Most Asian indexes closed lower on Wednesday, despite earlier shrugging off the declines seen on Wall Street overnight.
  • China factory activity came in a touch lower than forecast for January.
  • Energy-related stocks in the region declined as oil prices continued to fall.

Most Asian indexes closed lower on Wednesday, despite earlier shrugging off the declines seen on Wall Street overnight.

The Nikkei 225 closed lower for the sixth straight session after reversing slight gains late in the session. The index declined 0.83 percent, or 193.68 points, to end at 23,098.29 as automakers, financials and trading houses saw losses. Among index heavyweights, Fanuc Manufacturing closed lower by 0.66 percent, Toyota fell 1.95 percent and Fast Retailing gained 0.74 percent.

The technology sector was mixed, with Sony adding 0.5 percent and SoftBank lower by 0.73 percent by the end of the day.

Across the Korean Strait, the Kospi gave up early gains to finish the session just below the flat line. The index closed lower by 0.05 percent despite gains seen in some heavily weighted tech names.

Shares of Samsung Electronics rose more than 5 percent following an announcement of a 50:1 stock split, but later closed just 0.2 percent higher. The reason for the decision was "based on the view that a high share price was a hindrance to potential investors," the company said in a statement.

Samsung had earlier announced a record fourth-quarter profit on Wednesday, in line with what it had forecast earlier this month. Profit for the period rose 64.3 percent compared to one year ago to 15.2 trillion won ($14.15 billion). Other tech names were mixed: SK Hynix gained 0.55 percent and LG Display slid 1.08 percent.

Financials traded lower for the most part, as did energy-related stocks. Manufacturing names finished mixed, with steelmaker Posco advancing by 0.26 percent.

Down Under, the S&P/ASX 200 edged up 0.25 percent to close at 6,037.7 amid broad-based gains, with the exception of the energy and materials space. Declines seen in the energy sector came as oil prices continued to decline. Santos fell 1.16 percent and Beach Energy tumbled 4.06 percent by the end of the session.

The heavily weighted financials sub-index reversed early losses to edge up by 0.06 percent.

The rose 0.86 percent, or 279.98 points, to end at 32,887.27, with financial stocks mostly higher after recording losses in the last session. HSBC closed higher by 0.12 percent, China Construction Bank rose 1.81 percent and AIA advanced 0.6 percent. Property names closed mixed, while energy-related names came under pressure, with CNOOC falling 1.14 percent on the day.

Mainland markets finished in negative territory: The closed 0.19 percent lower and the Shenzhen composite fell 1.66 percent. Despite the declines, blue chip names recorded gains in the session. The CSI 300 index, which tracks large caps listed in Shanghai and Shenzhen, finished higher by 0.48 percent.

Official data released earlier showed factory activity expanded less than expected in January: China's manufacturing PMI came in at 51.3, missing the 51.5 figure forecast in a Reuters poll.

Meanwhile, President Donald Trump's State of the Union address on Wednesday — which was expected to be positive in tone — did not result in major market moves, although the dollar was softer after the speech.

U.S. stock index futures were higher, with Dow Jones industrial average futures rising 0.31 percent at 4:20 p.m. HK/SIN.

Markets in Malaysia were closed for Thaipusam.

Dollar edges lower 

In currency markets, the dollar index, which tracks the greenback against a basket of currencies, extended losses during the session. The dollar index traded at 88.885 at 4:07 p.m. HK/SIN, below Tuesday's close of 89.181. Meanwhile, the dollar traded softer against the yen at 108.70.

Moves in the dollar also came as the Federal Open Market Committee began its January meeting and its statement is due Wednesday during U.S. hours. The central bank is not expected to raise interest rates this week.

The Australian dollar was steady at $0.8084. The Aussie dollar had traded around the $0.81 handle before the release of core consumer inflation figures, which missed expectations by a touch.

On the commodities front, U.S. West Texas Intermediate crude futures slid 0.62 percent to trade at $64.10 per barrel and Brent crude futures declined 0.52 percent to traded at $68.66.

US stocks sold off

U.S. indexes fell on Tuesday as stocks sold off for a second day. The Dow Jones industrial average tumbled 362.59 points, or 1.37 percent, to close at 26,076.89.

That move lower came as U.S. government debt yields rose to their highest levels in around four years in the last session. The yield on the benchmark 10-year Treasury note last stood at 2.724 percent.

"The combination of profit taking into month-end, higher bond yields, stretched valuations and potential U.S. health care shake-up were the main drivers," analysts at ANZ Research said in a morning note.

Corporate news

Shares of Japan Post Bank and Japan Post Insurance closed down 2.45 percent and 1.13 percent, respectively. The companies said in a statement that they would be establishing a private equity fund management company. That company, called Japan Post Investment Corporation, will have an initial fund of as much as 120 billion yen ($1.1 billion), according to Reuters.

Elsewhere, Chinese conglomerate HNA Group informed creditors it could have a first-quarter cash shortfall of a minimum of 15 billion yuan ($2.4 billion), Reuters reported on Tuesday, citing a source. According to the news agency, the company said it was certain it could manage the issue.