Asia report: Markets mixed as Australia falls into recession

Markets in Asia were mixed as they closed on Wednesday, as Australia recorded its largest ever quarterly gross domestic product contraction on record.

In Japan, the Nikkei 225 was up 0.47% at 23,247.15, as the yen weakened 0.17% against the dollar to last trade at JPY 106.14.

Of the major components on the benchmark index, automation specialist Fanuc was up 2.68%, fashion firm Fast Retailing added 0.43%, and technology conglomerate SoftBank Group rose 0.95%.

The broader Topix index also advanced 0.47% by the end of trading, to close at 1,632.40.

On the mainland, the Shanghai Composite lost 0.17% to 3,404.80, and the smaller, technology-centric Shenzhen Composite rose 0.46% to 2,321.40.

South Korea’s Kospi was ahead 0.63% at 2,364.37, while the Hang Seng Index in Hong Kong slipped 0.26% to 25,120.09.

Both of the blue-chip technology stocks were stronger in Seoul, with Samsung Electronics up 0.37% and chipmaker SK Hynix 0.4% firmer.

“The apparent disconnect between markets and the real world gets wider and wider, fuelled by low interest rates, the prospect of more easing, but also the hope that the overall situation will continue to improve,” said IG chief market analyst Chris Beauchamp.

“On that point, there still seems no sign of a real downward turn in data.

“True, many data points have flattened out after the March-June rebound, but flattening out is not the same as falling.”

Oil prices were higher at the end of the Asian day, with Brent crude last up 0.24% at $45.69 per barrel, and West Texas Intermediate 0.33% firmer at $42.90.

In Australia, the S&P/ASX 200 added 1.84% to settle at 6,063.20, as investors digested fresh economic data out of Canberra.

According to the Australian Bureau of Statistics, the country’s gross domestic fell by 7% for the June quarter, making for the biggest quarterly fall on record.

It came after GDP contracted by 0.3% in the quarter to March.

“Australia slipped into a recession as the economy contracted for a second consecutive quarter,” noted CMC Markets analyst David Madden.

“In the latest quarter, the economy shrank by 7%, a bigger contraction than expected.”

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was ahead 0.93% at 11,902.98.

The down under dollars were a mixed picture against the greenback, with the Aussie last 0.4% weaker at AUD 1.3618, while the Kiwi strengthened 0.02% to NZD 1.4793.