Asia report: Chinese tech plays weaker on mixed day for region

Wednesday brought a mixed performance from share markets in the Asia-Pacific region, with Chinese technology stocks in the red after electric vehicle maker Xpeng took a tumble.

In Japan, the Nikkei 225 was down 0.49% at 28,313.47, as the yen strengthened 0.23% on the dollar to last trade at JPY 136.40.

Technology conglomerate SoftBank Group managed gains of 0.29%, while automation specialist Fanuc was down 0.73% and fashion firm Fast Retailing lost 0.93%.

Energy generators were on the front foot, however, after Japan’s prime minister Fumio Kishida confirmed reports that the government was looking to restart more nuclear reactors.

Hokkaido Electric Power was up 2.1%, Kansai Electric Power added 2.88%, Tohoku Electric Power advanced 3.79%, and Tokyo Electric Power Company surged 9.96%.

The broader Topix index was off 0.22% by the end of trading in Tokyo, settling at 1,967.18.

On the mainland, the Shanghai Composite fell 1.86% to 3,215.20, and the technology-heavy Shenzhen Component slid 2.88% to 12,096.39.

South Korea’s Kospi managed gains of 0.5%, while the Hang Seng Index in Hong Kong lost 1.2% to 19,268.74.

China-based electric vehicle maker Xpeng plunged 12.18% in the special administrative region, after it reported a bigger-than-expected quarterly loss of CNY 2.7bn (£330m), compared to the CNY 1.19bn loss it recorded a year ago.

It was a weak session for the broader tech sector in Hong Kong, with Alibaba Group down 2.43%, Meituan losing 2.73%, NetEase falling 0.73%, and Tencent Holdings 0.9% lower.

The blue-chip technology stocks were lower in Seoul too, with Samsung Electronics slipping 0.17% and SK Hynix off 0.43%.

Korean carmakers were in the red as well, after US regulators recalled more than 280,000 vehicles made by Hyundai and Kia over reported fire risks.

Hyundai Motor was down 0.53% by the end of the day, while Kia Corporation slid 1.03%.

The US National Highway Traffic Safety Administration (NHTSA) ordered certain vehicles to be removed from sale overnight, and told drivers to “park their cars outside and away from homes”.

It said an electrical short could cause a fire both while driving and while parked and turned off, although it added that there were no fires, injuries or crashes confirmed as related to the faults at this stage.

“Asian markets were unable to shake off the general air of malaise amid a faltering Chinese economy which is battling with lockdown restrictions, a struggling property market and lower consumer confidence,” said Interactive Investor head of markets Richard Hunter.

“Despite some signs that the central bank stands poised to lend some assistance to the property sector in particular, doubts remain whether the measures shown so far are anywhere near sufficient.”

Hunter said that from a global perspective, these were “testing times” for investors and consumers alike.

“For the latter, higher borrowing as well as living costs are battering sentiment, with the growing risks of recession in many developed companies further darkening the outlook.

“The pressure will also remain heavy at the corporate level, where despite the resilience which many companies have shown during the recent quarterly reporting season, expectations remain that earnings expectations will need to be revised down as general pricing pressures remain.”

Oil prices were higher at the end of the Asian day, with both Brent crude and West Texas Intermediate futures rising 0.93% on ICE and NYMEX to a respective $101.15 and $94.58 per barrel.

In Australia, the S&P/ASX 200 was up 0.52% at 6,998.10, while across the Tasman Sea, New Zealand’s S&P/NZX 50 advanced 0.1% to 11,655.33.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.22% at AUD 1.4461, and the Kiwi retreating 0.32% to NZD 1.6139.

Reporting by Josh White at Sharecast.com.