Many Asian stock markets moved lower Thursday, giving up early gains ahead of key policy statements due out of the US and Europe, though Japan’s market managed to hold on to some gains.
Japan’s Nikkei Stock Average JP:NIK +0.47 percent rose 0.5 percent in the morning session, but South Korea’s Kospi KR:0100 +0.24 percent slipped 0.2 percent, and Australia’s S&P/ASX 200 index AU:XJO -0.37 percent lost 0.4 percent after the country’s unemployment rate unexpectedly rose in July. See report on Australia’s employment data.
Hong Kong’s Hang Seng Index HK:HSI -0.65 percent slipped 0.8 percent while China’s Shanghai Composite Index CN:000001 -0.08 percent was down 0.2 percent.
Global stock markets had put in a strong performance Wednesday, boosted by “expectations that more fiscal and monetary stimulus is on the way and some relief that European policy makers took constructive steps on fiscal issues,” said Yelena Shulyatyeva, a strategist at BNP Paribas.
A German court ruled in favour of proposed euro-zone bailouts, the Federal Reserve’s Beige Book indicated that the US economy is still growing, and details emerged on the US president’s job-creation proposals to be unveiled later Thursday. Read more about US stock market gains.
Still, some strategists were doubtful about continued gains for equity markets with Credit Agricole Asia-based strategists noting “the jump in equities overnight looks more like relief rally than any major shift in sentiment.”
“The respite in the risk-averse environment could be short lived if the market is disappointed by key policy makers’ comments today,” they said.
Among key events due later in the global day, the European Central Bank and the Bank of England were also due to announce rate decisions. See preview of ECB, Bank of England decisions.
Federal Reserve Chair Ben Bernanke was also due to speak Thursday, with investors hoping for some clues about how the US central bank intends to support the economy. Read Bernanke speech preview.
“Fedspeak is strongly hinting at further easing measures at the extended Federal Open Market Committee meeting on September 20-21,” said Shulyatyeva at BNP Paribas.
Anxiety weighed on some banking shares in Hong Kong, where Industrial & Commercial Bank of China Ltd HK:1398 -0.79 percent IDCBF -0.78 percent CN:601398 +0.73 percent fell 1.4 percent, and China Merchants Bank Co. HK:3968 -1.01 percent CIHHF -1.96 percent CN:600036 +0.25 percent lost 1.3 percent.
HSBC Holdings PLC HK:5 +0.39 percent HBC -0.31 percent – a heavyweight on the Hang Seng Index – bucked the trend, however, gaining 0.4 percent after announcing plans for 3,000 job cuts in its Hong Kong operations. See report on HSBC job cuts.
Japanese financials fared better, with Aozora Bank Ltd JP:8304 +2.27 percent AOZOY 0.00 percent ending the morning session up 2.3 percent and Mizuho Financial Group Inc. JP:8411 +0.90 percent MFG +1.41 percent up 0.9 percent in Tokyo.
But Australian banks couldn’t hold onto gains after the jobs data, with Commonwealth Bank of Australia AU:CBA -1.41 percent CBAUF +3.18 percent down 1.3 percent and Westpac Banking Corp. AU:WBC -0.55 percent WEBNF +3.73 percent down 1 percent.
Australian retailers also came under pressure following the data, with department store Myer Holdings Ltd AU:MYR -2.02 percent trading down 1.6 percent.
Belle International Holdings Ltd HK:1880 -8.12 percent BELLY +2.25 percent dropped 9.2 percent in Hong Kong after the retailer announced that its chair and management made a $471 million private placement of shares.
More broadly, however, some analysts were optimistic over the Hong Kong market’s direction.
“I think investors believe China is still on the right track of a soft landing with moderating inflation, still relatively resilient economic data, and cheap valuation, thus decoupling from US and Europe,” said Jim Chen, an investment manager for Baring Asset Management based in Hong Kong.
On the plus side, some oil and gas companies advanced after benchmark Nymex-crude futures hit a five-week high in regular trading Wednesday.
Japan’s Inpex Corp. JP:1605 +2.97 percent IPXHY +1.59 percent rose 3 percent, and Caltex Australia Ltd AU:CTX +4.37 percent CTXAY 0.00 percent jumped 5 percent in Sydney. -By Sarah Turner