Asian shares mixed after China rate hike
HONG KONG—Asian stocks were mixed Thursday following China’s fifth interest rate hike in eight months, while Tokyo slipped after the government announced new “stress tests” for atomic reactors.
The Chinese central bank increased its benchmark deposit and lending rates by 25 basis points in the latest salvo by leaders battling to bring inflation under control.
Beijing, which has expressed fears that consumer price rises could trigger social unrest, earlier this year set a full-year target for inflation of about four percent but data showed it hit a three-year high of 5.5 percent in May.
Shanghai fell 0.58 percent, or 16.21 points, to 2,794.27 and Tokyo fell 0.11 percent, or 11.34 points, to 10,071.14.
Hong Kong was flat, edging up 12.63 points to 22,530.18 while Sydney was also flat, adding 0.5 points to 4,605.5.
Seoul closed 0.43 percent, or 9.40 points, higher at 2,180.59.
There are fears the rate rises could put the brakes on China’s growth and in turn stunt other economies that rely on the huge nation’s appetite for exports, such as Australia.
In Tokyo the Nikkei edged lower after it hit its highest close since March 11 when a devastating earthquake shattered the northeast of Japan, sending global markets tumbling.
“The Nikkei is approaching its pre-quake level, indicating that the market has priced in a healthy recovery in Japanese corporate profits for the upcoming earnings season,” Hideyuki Ishiguro, a strategist at Okasan Securities said.
However, utilities led the market’s fall after the government said Wednesday it will run “stress tests” on all the nation’s atomic reactors amid the ongoing nuclear crisis sparked by the March disaster.
Uncertainties resurfaced as the government was seen to be changing course, having earlier declared all plants safe, said Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities.
On currency markets the eurozone crisis continued to weigh on sentiment after Portugal’s credit rating was reduced to junk status by Moody’s and Standard & Poor’s warned a plan to bail out Greece could amount to a default.
“The downgrading of Portugal that came after S&P’s warning stoked worries about contagion spreading to other peripheral nations such as Ireland,” Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ, said.
The euro fetched $1.4311 in European trade against $1.4314 in New York late Wednesday when it suffered a sell-off due to concerns that the Greek and Portuguese troubles could spread. The euro stood at 1.4450 in Asia on Wednesday.
The single currency was also at 115.85 from 115.88 while the dollar fetched 80.93 yen from 80.88 yen.
New York’s main contract, West Texas Intermediate for August delivery, rose 75 cents to $97.40 a barrel and Brent North Sea crude for August gained 55 cents to $114.17.
Gold closed at $1,530.80-$1,531.80 an ounce in Hong Kong, up from $1,516.00-$1,517.00 at the close on Wednesday.
In other markets:
— Singapore rose 0.36 percent, or 11.16 points, to 3,125.87.
Neptune Orient Lines fell 0.67 percent to Sg$1.49 and CapitaLand gained 1.72 percent to Sg$2.95.
Tiger Airways, whose Australian subsidiary has been grounded by regulators due to safety concerns, dipped 0.48 percent to Sg$1.04.
— Taipei fell 0.58 percent, or 51.02 points, to 8,773.42.
Formosa Plastics shed 2.24 percent to Tw$109.0 while TSMC fell 1.65 percent to Tw$71.6.
— Manila closed 0.52 percent, or 22.90 points, lower at 4,375.85.
Alliance Global fell 0.52 percent to 11.54 pesos and SM Prime Holdings gave up 0.86 percent to 11.58 pesos while San Miguel added 1.27 percent to 127.50 pesos and Atlas Consolidated Mining jumped 5.61 percent to 22.60 pesos.
— Wellington closed flat, dipping 0.27 points to 3,460.56.
Air New Zealand rose 2.68 percent to NZ$1.15, Contact Energy added 0.38 percent to NZ$5.34 and Telecom gained 1.01 percent to NZ$2.51 while Fletcher Building edged 0.59 percent down to NZ$8.36.
— Jakarta rose 0.78 percent, or 30.52 points, to 3,939.47.
Cigarette maker Gudang Garam rose 2.5 percent to 49,300 rupiah, while Bank Mandiri gained 1.4 percent to 7,350 rupiah.
— Kuala Lumpur closed flat, dipping 1.10 points to 1,590.24.
AirAsia eased 1.4 percent to 3.45 ringgit and Axiata Group lost 0.4 percent to 5.02, while Sime Darby rose 0.3 percent to 9.23 ringgit and CIMB Group added 0.1 percent to 8.90.
— Bangkok rose 0.97 percent, or 10.40 points, to 1,083.08.
Bangkok Bank rose 1.2 percent to 167 baht and Thainox Stainless surged 9.5 percent to 2.08 baht.
— Mumbai rose 1.88 percent, or 351.33 points, to 19,078.3.
India’s largest mobile phone firm Bharti Airtel rose 3.88 percent or 14.85 rupees to 398.05 rupees while the largest private aluminium producer Hindalco rose 3.63 percent or 6.85 rupees to 195.7.
Shares of India’s only listed microfinance firm SKS jumped 20 percent or 68 rupees to 411.
