Asia report: Markets mixed as investors watch Covid developments

Markets in Asia finished in a mixed state on Wednesday, as investors continued to weigh the prospect of a vaccine rollout with the short-term economic impacts of the Covid-19 pandemic.

In Japan, the Nikkei 225 was up 0.5% at 26,296.86, as the yen strengthened 0.04% against the dollar to last trade at JPY 104.40.

Of the major components on the benchmark index, automation specialist Fanuc was up 1.36%, fashion firm Fast Retailing added 0.82%, and technology conglomerate SoftBank Group was 0.51% higher.

The broader Topix index managed gains of 0.3% by the end of trading in Tokyo, settling at 1,767.67.

On the mainland, the Shanghai Composite was down 1.19% at 3,362.33, and the smaller, technology-heavy Shenzhen Composite fell 1.74% to 2,254.30.

South Korea’s Kospi was 0.62% weaker at 2,601.54, while the Hang Seng Index in Hong Kong rose 0.31% to 26,669.75.

Smartphone manufacturer Xiaomi saw its shares fall 3.68% in the special administrative region, even after it reported a 19% rise in adjusted net profits for the quarter ended 30 September.

The company also ascended the global rankings of smartphone makers, with its third quarter shipments putting it in third place, behind Samsung and Huawei and ahead of Apple.

Both of the blue-chip technology stocks were also weaker in Seoul, with Samsung Electronics down 1.62% and SK Hynix 1.42% lower.

The mixed moves in Asia came despite a stellar session on Wall Street overnight, with sentiment there boosted by vaccine hopes as well as the prospect of president Donald Trump departing from his role in January in what CMC Markets analyst David Madden described as a “calm and measured” manner.

“The update on Monday from AstraZeneca-Oxford University that its potential Covid-19 vaccine has made great progress in terms of development and that added to the recent spate of positive updates from the likes of Moderna and Pfizer-BioNTech.

“A major factor in yesterday’s risk-on attitude was the recent news that in the US, federal funds have been deployed to facilities the handing over the reins of power from president Trump to president-elect Joe Biden in January.”

Madden noted that, in the immediate aftermath of the election, Trump was claiming that voter fraud had taken place.

“That spooked some traders as there was a feeling it could bring about a protracted legal battle with respect to the result of the election.

“The Donald has yet to concede that Mr Biden won the election but there is a feeling that there will be a smooth transition of power in the New Year.

“The Dow Jones closed above 30,000 for the first time and the Russell 2000 also set another record close,” Madden said, adding that dealers had been buying up stocks on the basis that Trump would not “throw a tantrum” about departing from the top job.

Oil prices were higher at the end of the Asian day, with Brent crude last up 1.4% at $48.53 per barrel, and West Texas Intermediate 1.09% firmer at $45.40.

In Australia, the S&P/ASX 200 was 0.59% firmer at 6,683.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 advanced 0.91% to 12,667.98.

Both of the down under dollars were weaker against the greenback, with the Aussie slipping 0.13% to AUD 1.3602, and the Kiwi retreating 0.03% to NZD 1.4333.