Asia report: Hong Kong stocks lead region's markets lower

Stocks in Asia closed lower across the board on Wednesday as a tone of caution entered markets, with Japan returning from a public holiday on Tuesday.

In Japan, the Nikkei 225 was down 1.61% at 29,671.70, as the yen weakened 0.52% against the dollar to last trade at JPY 105.80.

Fashion firm Fast Retailing was up 2%, while among the benchmark’s other major components, automation specialist Fanuc was down 4.66% and technology conglomerate SoftBank Group lost 5.2%.

The broader Topix index was 1.82% weaker by the end of trading in Tokyo, closing at 1,903.07.

On the mainland, the Shanghai Composite lost 1.99% at 3,564.08, and the smaller, technology-heavy Shenzhen Composite was 2.03% lower at 2,347.28.

South Korea’s Kospi lost 2.45% at 2,994.98, while the Hang Seng Index in Hong Kong was 2.99% weaker at 29,718.24.

The losses in the special administrative region came even after the city’s government outlined plans to spend more than HKD 120bn to underpin its economy through recession.

“Asia markets had a predominantly negative session with the Nikkei 225 closing below the 30,000 level for the first time in over a week,” said CMC Markets chief market analyst Michael Hewson.

“Hong Kong shares led the decline after it was announced that the Hong Kong government was increasing stamp duty taxes on share trading from 0.1% to 0.13%.”

In Seoul, the blue-chip technology stocks finished in a mixed state, with Samsung Electronics flat, and SK Hynix 1.81% lower.

Overnight in the United States, Federal Reserve chair Jerome Powell told Congress that the country’s economy was some way off the central bank’s employment and inflation goals.

He described inflation as remaining “soft”, saying in his testimony that the Fed was committed to its existing policy trajectory.

Oil prices were higher at the end of the Asian day, with Brent crude last up 0.58% at $65.75 per barrel, and West Texas Intermediate adding 0.47% at $61.96.

In Australia, the S&P/ASX 200 was off 0.9% at 6,777.80, as the hefty financials subindex lost 0.45%.

The country’s big four banks were mixed, with National Australia Bank rising 0.2%, while Australia and New Zealand Banking Group was down 0.67%, Commonwealth Bank of Australia lost 0.61%, and Westpac Banking Corporation was off 0.46%.

In fresh data out of Canberra, wages in Australia grew at their slowest pace annually on record, with the wage price index rising 06% for the quarter through December.

On an annual basis, wage growth remained at a record low of 1.4% for the second quarter in a row.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.86% at 12,282.42, led lower by produce company Scales Corporation, which was 7% weaker.

Both of the down under dollars were stronger on the greenback, with the Aussie last off 0.05% at AUD 1.2634, and the Kiwi retreating 0.48% to NZD 1.3552.