Asia Markets

Asian stocks ease as dollar gives up some overnight gains

Key Points
  • Asian stocks closed with slight losses, although gains were seen in Australia.
  • The dollar index gave up some of its overnight gains ahead of the end of the Federal Reserve's meeting.
  • China Caixin manufacturing PMI topped expectations.

Asian stocks closed slightly lower on Wednesday following the mixed session on Wall Street as several markets in the region resumed trade after a holiday.

Japan's edged down by 0.16 percent, or 35.25 points, to close at 22,472.78. The broader Topix also recorded slight weakness and finished lower by 0.15 percent as its mining and oil subindexes led losses for the day. Automakers were also broadly traded lower.

Elsewhere, the Kospi shed 0.39 percent to close at 2,505.61 as most steelmakers slipped and automakers declined.

Hong Kong's edged down by 0.49 percent by 3:45 p.m. HK/SIN, with declines in large cap financials before the market close. Casino stocks, however, gained on the back of revenues topping expectations last month, with SJM Holdings up 5.18 percent ahead of the end of the trading session.

Mainland markets gave up early gains to close little changed, with the ending flat at 3,082.10 and the Shenzhen composite inching lower by 0.07 percent to 1,774.90.

Down Under, the S&P/ASX 200 bucked the downward trend in the region to close 0.58 percent higher at 6,050.20, with broad-based gains seen in all sectors except telecommunications.

MSCI's broad index of shares in Asia Pacific excluding Japan last traded lower by 0.14 percent.

The tepid moves in early trade came on the back of a mixed session on Wall Street, with the Nasdaq composite advancing as Apple stock jumped ahead of expectation-topping results released after the market close.

Almost 80 percent of S&P 500 companies that had reported first-quarter results as of Monday had topped expectations, according to Thomson Reuters I/B/E/S.

Dollar gives up some gains 

In currencies, the dollar held onto most of its overnight gains ahead of the end of the Federal Reserve's May meeting. The dollar index, which tracks the greenback against a basket of six currencies, was slightly softer at 92.330 at 3:32 p.m. HK/SIN, but remained near a four-month high.

Most analysts expect the Fed to hold interest rates steady this month, but will be on the lookout for signals on the central bank's views on inflation and the economy.

Against the yen, the dollar was mostly steady at 109.76. Meanwhile, the Australian dollar edged higher after slipping below the $0.75 handle in the last session. The Aussie dollar last traded at $0.7526.

"What's happened most recently has been a growing divergence in the growth and the inflation data in the U.S. versus Europe and Japan, in particular. And we think that persists for a little while longer, but as you start to go into the second half of this year, euro zone inflation ... starts to tick up, as does Japanese inflation," Marc Franklin, senior portfolio manager at Conning Asia Pacific, told CNBC's "Capital Connection."

"So cyclically, on a shorter term basis, we think this rebound in the dollar is [for] a fairly finite period of time."

Oil prices edged higher after sliding in the last session amid strength in the dollar. Brent crude futures for July delivery gained 0.49 percent to trade at at $73.49 per barrel and U.S. West Texas Intermediate futures for June delivery tacked on 0.7 percent to trade at $67.72.

Recent concerns over the possibility of the U.S. re-imposing sanctions on Iran have supported oil prices.

On the economic front, China's Caixin manufacturing PMI rose to 51.1 last month, compared to a forecast of 50.9.

In individual movers, SK Innovation advanced 6.11 percent following news earlier this week that it would buy back around 1 trillion won (932.6 million) of its shares.

Meanwhile, shares of Standard Chartered were down 1.75 percent in Hong Kong as of 3:37 p.m. HK/SIN. The bank reported earlier in the day that first-quarter pretax profit topped expectations.

Elsewhere, Qantas stock jumped 8.1 percent after the airline announced it was expecting record full-year pre-tax profit of between 1.55 billion and 1.6 billion Australian dollars ($1.17 billion to $1.2 billion).