Asia report: Markets mixed as IMF hikes global growth forecast

Stock markets in Asia finished mixed on Wednesday, with bourses in mainland China and Hong Kong on the back foot, even after the International Monetary Fund revised its forecast for global growth in 2021 upwards.

In Japan, the Nikkei 225 managed gains of 0.12% to 29,730.79, as the yen weakened 0.06% against the dollar to last trade at JPY 109.82.

Technology conglomerate SoftBank Group was up 1.2%, while among the benchmark’s other major components, robotics specialist Fanuc was down 0.52% and fashion firm Fast Retailing was off 1.89%.

The broader Topix index was 0.67% firmer by the end of trading in Tokyo, settling at 1,967.43.

On the mainland, the Shanghai Composite slipped 0.01% to 3,479.63, and the smaller, technology-heavy Shenzhen Composite was 0.36% weaker at 2,258.11.

Fresh data showed China’s foreign exchange reserves fell to $3.17trn in March, from $3.21trn in February, below the consensus, for $3.18trn.

“Negative currency valuation effects shaved off around $27bn, thanks to euro, yen and sterling depreciation,” said Pantheon Macroeconomics chief Asia economist Freya Beamish.

“The further jump in sovereign yields will have taken off more.”

Beamish said that separately, it was possible that authorities in Beijing had been pushing state-owned banks to engage in renminbi weakening activities, but the moves were also consistent with market-oriented behaviour.

“In any case, the most recent renminbi weakness is part of a global story of dollar strength.”

South Korea’s Kospi was up 0.33% at 3,137.41, while the Hang Seng Index in Hong Kong lost 0.91% to 28,674.80.

The blue-chip technology stocks were mixed in Seoul, with SK Hynix up 0.35%, while Samsung Electronics slipped 0.47%.

Samsung issued its earnings guidance for the first quarter during the day, anticipating a 44% improvement in operating profit year-on-year to KRW 9.3trn.

Investors were digesting the latest global economic forecast from the International Monetary Fund during the Asian session, with the organisation saying it now expected growth of 6% in 2021.

That was a decent improvement from its January forecast of 5.5%, with chief economist Gita Gopinath saying that a “way out of this health and economic crisis is increasingly visible”.

Oil prices were lower at the end of the Asian day, with Brent crude last down 0.22% at $62.60 per barrel, and West Texas Intermediate falling 0.34% to $59.13.

In Australia, the S&P/ASX 200 was ahead 0.61% at 6,928.00, as the hefty financials index reversed earlier losses to finish 0.35% higher.

Among the country’s big four banks, Australia and New Zealand Banking Group was up 0.32%, Commonwealth Bank of Australia added 0.51%, National Australia Bank advanced 0.42%, and Westpac Banking Corporation was 0.57% higher.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 gained 0.7% to 12,487.59, with the country’s major exporters rising on the back of renewed hopes for the global economy.

Medical equipment maker Fisher and Paykel Healthcare was up 3.5%, and specialist dairy exporter A2 Milk added 2.4%.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.52% at AUD 1.3117, and the Kiwi retreating 0.4% to NZD 1.4222.