Asia report: Markets finish weaker, China web plays plunge

Markets in Asia were weaker across the board on Tuesday, with bourses in China leading the charge downwards, as investors monitored the latest developments on the Covid-19 front.

In Japan, the Nikkei 225 was down 0.96% at 28,546.18, as the yen weakened 0.04% against the dollar to last trade at JPY 103.79.

Uniqlo owner Fast Retailing was down 2.51%, while among the benchmark’s other major components, robotics specialist Fanuc was ahead 0.7% and technology giant SoftBank Group eked out gains of 0.01%.

The broader Topix index was 0.75% weaker by the end of trading in Tokyo, closing at 1,848.00.

Investors in the country spent much of the session poring over the minutes from the Bank of Japan’s December policy meeting, which were released on Tuesday.

Members of the central bank were shown to agree that they would not hesitate to take additional easing measures to underpin Japan’s economy amid the Covid-19 pandemic.

“Based on this, most members shared the view that, as for policy rates, it would expect short- and long-term interest rates to remain at their present or lower levels,” the minutes read.

On the mainland, the Shanghai Composite lost 1.51% to 3,569.43, and the smaller, technology-centric Shenzhen Composite slid 1.98% to 2,414.16.

South Korea’s Kospi was down 2.14% at 3,140.31, while the Hang Seng Index in Hong Kong was down 2.55% at 29,391.26.

Among the leading losers in the special administrative region were Chinese internet plays, with Meituan down 5.3% and Tencent off 6.26%.

The blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 3.02% and SK Hynix off 4.44%.

In coronavirus news, US biotechnology company Moderna said overnight that it was developing a booster vaccine for the Covid-19 variant strain discovered in South Africa.

It said its current vaccine appeared to be effective against both the South African strain and the variant discovered in the UK, which are understood to be significantly more transmissible than other strains of the virus.

The jab’s effectiveness against the South African variant, however, appeared likely to be less.

Sentiment was mixed at the start of the Asian day, with stocks on Wall Street turning in a mixed performance overnight as analysts described the unwinding of US equities coming in “fits and starts”, as Axi chief global market strategist Stephen Innes put it.

“But the real sentiment shifter coincided with China's lockdown,” he explained.

“Since then, it’s been a tough grind for the reflation trade as every headline big or small gets magnified ten folds like the stimulus headlines.”

Innes said there was a bipartisan group “pushing back” on some of the specifics surrounding Biden's $1.9trn stimulus proposal.

“However, this is all part of the negotiating process.

“The Democrats will always have the option of going down the budget reconciliation route if the bipartisan way ends up unsatisfactory."

Oil prices were higher as the region went to bed, with Brent crude last up 0.59% at $56.21 per barrel, and West Texas Intermediate ahead 0.61% at $53.09.

Trading was closed in Sydney for the Australia Day holiday, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.56% at 13,323.46.

The down under dollars painted a mixed picture against the greenback at the end of the session, with the Aussie last 0.25% weaker at AUD 1.2998, while the Kiwi was flat at NZD 1.3894.