Asian shares mixed after consensus-beating Japan GDP data

Office workers pass by monitors displaying the Taiwan Stock Exchange in Taipei, Taiwan, on Aug. 13, 2015. Asian shares were mixed on Monday, Aug. 17, with Tokyo helped by better than expected Japanese growth figures and Shanghai boosted by a government pledge to support China’s volatile stock markets.
AP PHOTO/WALLY SANTANA

HONG KONG–Asian shares were mixed on Monday, with Tokyo helped by better than expected Japanese growth figures and Shanghai boosted by a government pledge to support China’s volatile stock markets.

The dollar strengthened after solid US data boosted expectations of an imminent rate rise, heaping pressure on oil prices after they slid to a six-and-a-half-year low last week.

Hong Kong lost 0.74 percent, or 176.38 points, to end at 23,814.65 on concerns China’s devaluation of the yuan would hurt local companies, while Shanghai rose 0.74 percent, or 17.09 points, to 2,327.49.

Sydney ended up 0.43 percent, or 23.16 points, at 5,379.70 and Seoul dropped 0.75 percent, or 14.94 points, to close at 1,968.52.

Tokyo added 0.49 percent, or 100.81 points, to end at 20,620.26 after news Japan’s economy shrank a lower-than-expected 0.4 percent in the April-June quarter and 1.6 percent from a year earlier.

The weak reading still beat market expectations for a quarterly fall of 0.5 percent, or a 1.8 percent annualized drop, and spurred hopes the government will help prop up the stumbling economy.

Shanghai, meanwhile, ended a see-saw session higher as investors weighed concerns about the health of the economy against a government pledge to support equities for a “number of years” to contain volatility.

The promise, which analysts said was designed to soothe investors’ frazzled nerves, came after the central bank’s shock devaluation of the yuan last week plunged global financial markets into turmoil.

“The market is less uncertain than before,” Zhang Qi, an analyst from Haitong Securities told AFP, predicting the rebound will continue until the end of August.

The sudden cut in the Chinese currency inflamed fears Asia’s top economy is growing more slowly than previously thought, hurting commodity prices and sparking the worst two-day selloff in Asia-Pacific currencies since 1998.

While the central bank lifted the daily reference rate for the yuan for the second consecutive day on Monday, dealers still fear Beijing could be angling for a long-term depreciation to support stalling exports.

Hong Kong hurts

Hong Kong shares were hit by concerns the cheaper yuan will impact local companies, particularly those with high US dollar-debt and retailers that could suffer if mainland tourist numbers fall.

Chinese companies trading in Hong Kong, as measured by the MSCI Index, are already far more expensive than their mainland counterparts.

“In the longer run, the Chinese companies will outperform,” Herald van der Linde, Hong Kong based head of Asia-Pacific equity strategy at HSBC, told Bloomberg News.

Wall Street finished higher Friday after solid industrial production, wholesale prices and July retail sales data all signalled that the world’s top economy is strengthening.

The numbers all added to expectations the US Federal Reserve could be set to raise its key interest rate as early as next month, driving up the dollar in Asia on Monday.

The greenback was quoted at 124.46 yen, up from 124.32 yen in New York late Friday. The euro traded at $1.1102 and 138.18 yen, from $1.1112 and 138.14 yen.

But the stronger US currency added to pressure on oil prices, which continued their slide on expectations of a growing supply glut.

A stronger greenback makes dollar-denominated oil more expensive for overseas investors.

US benchmark West Texas Intermediate for September delivery tumbled 66 cents to $41.84 and Brent crude for October fell 16 cents to $48.62 a barrel.

Gold was at $1,116.46 compared to $1,121.23 late Friday.

In other markets:

— Mumbai fell 0.67 percent, or 189.04 points, to 27,878.27.

Bank of Baroda gained 15.15 percent to 212.40 rupees, while Agro firm KSCL slipped 16.97 percent to rupees 499.70.

— Malaysia’s main index fell 1.52 percent, or 24.28 points, to close at 1,572.54.

RHB Capital lost 2.08 percent to 6.58 ringgit, Malayan Banking dropped 1.21 percent to 8.19 while Genting Malaysia added 1.55 percent to 3.94 ringgit.

— Bangkok fell 0.37 percent, or 5.18 points, to 1,408.74.

Power firm Electricity Generating lost 1.61 percent to 153 baht, while oil company PTT dropped 1.66 percent to 297 baht.

— Singapore closed 1.51 percent, or 46.90 points, lower at 3,067.35.

Oversea-Chinese Banking Corp. fell 1.64 percent to Sg$9.60 and oil rig maker Keppel Corp. tumbled 1.09 percent to Sg$7.27.

— Taipei dropped 1.11 percent, or 92.22 points, to 8,213.42.

Taiwan Semiconductor Manufacturing Co. lost 1.59 percent to Tw$124.0 while leading chip design house MediaTek dropped 1.85 percent to Tw$265.0.

— Wellington gained 0.54 percent, or 30.97 points, to 5,727.42.

Contact Energy rose 1.55 percent to NZ5,24 and Spark New Zealand was up 4.32 percent at NZ$2.775.

Jakarta was closed for a public holiday.

— Manila fell 0.97 percent, or 71.60 points, to 7,336.84.

Top-traded Universal Robina Corp. lost 1.05 percent to 188 pesos, while BDO Unibank ended 3.01 percent down to 99.90 pesos.