Asia report: Markets mixed but muted after downbeat Fed minutes

Investors in the Asia-Pacific region had a mixed day on Thursday, with markets showing muted movement in both directions.

The latest minutes from the US Federal Reserve, released overnight, put a dampener on sentiment, as officials suggested that the recent banking liquidity crisis had added to the likelihood of economic recession.

“Asian equities have once again traded with a mixed tone,” said Patrick Munnelly at TickMill Group.

“The handover from the US was less than convincing - US CPI came in below expectations, but the initial rally fizzled out as a ‘buy the rumour, sell the fact’ mentality set in.”

Munnelly noted that all US benchmarks ended Wednesday’s session in the red.

“The reversal was extended after FOMC minutes gave little colour on the future of US rates as rate projections into December remained unchanged.

“[San Francisco Fed president Mary] Daly, speaking after the FOMC minutes release, reiterated the ‘more work to do’ mantra.”

Markets mixed after downbeat Fed minutes

In Japan, the Nikkei 225 was up by 0.26% to reach 28,156.97, while the Topix increased by 0.05% to 2,007.93.

Among the leaders in Tokyo were Aeon, which rose by 2.7%, while Kyowa Kirin added 2.46% and Daiichi Sankyo advanced 2.14%.

Mainland China's markets were down, with the Shanghai Composite falling 0.27% to 3,318.36, and the Shenzhen Component dropping 1.21% to 11,739.84.

Dawning Information Industry Co fell 7.68% in Shanghai, while CIG ShangHai slid 6.79%.

Hong Kong's Hang Seng Index managed gains of 0.17% to reach 20,344.48, with WuXi Biologics rising by 7.81%, Hansoh Pharmaceutical Group by 3.39%, and Sino Biopharmaceutical by 3.36%.

South Korea's Kospi added 0.43% to close at 2,561.66, with LG Display up 5.12%, and HMM ahead 1.48%.

In Australia, the S&P/ASX 200 was down 0.27% to settle at 7,324.10, with Block losing 5.78% and Champion Iron sliding 3.96%.

BHP Group slipped 0.94% after it secured shareholder approval for its AUD 9.6bn takeover of nickel and copper miner Oz Minerals, with almost 79% of proxy votes in favour of the deal.

The takeover offer would include AUD 26.50 in cash from BHP, and AUD 1.75 from Oz Minerals as a special dividend.

Oz Minerals shares were set to be delisted on 18 April, pending approval from Australia's federal courts on 17 April.

New Zealand's S&P/NZX 50 was up 0.11% to finish the day at 11,930.86, with Eroad rising 5.17%, and Restaurant Brands NZ ahead 3.82%.

In currency markets, the yen was last 0.01% weaker against the dollar to trade at JPY 133.15, while the Aussie was 0.51% stronger at AUD 1.4870, and the Kiwi advanced 0.41% on the greenback to change hands at NZD 1.6030.

Oil prices were relatively stable, with Brent crude futures last down 0.01% on ICE at $87.32 per barrel, and the NYMEX quote for West Texas Intermediate up by 0.06% to reach $83.31.

Exports from China surge ahead of expectations

In economic news, China's exports topped expectations in March, with a surprising surge of 14.8% to end a five-month losing streak.

Imports also beat expectations, with a smaller-than-expected decline of 1.4%.

The country's dollar-denominated trade surplus came in at $88.19bn for the month - much bigger than the $39.2bn economists had pencilled in.

“Global demand is likely to cool significantly, with the recent International banking crises compounding the hit from the previous rate hikes,” said Pantheon Macroeconomics chief China economist Duncan Wrigley.

“China’s ability to diversify its trade to Latin America, Africa, Russia and ASEAN, capitalising on Belt-and-Road linkages, suggests the potential to continue to outperform other exporting countries, but only to a degree.”

Wrigley said excess production capacity, leading to price cuts for automobiles and other products, should also boost China's export price competitiveness, also cushioning export volumes.

“Overall, though, the March bounce in Chinese exports probably will be fairly short lived as global demand weakens.”

South Korea meanwhile saw further declines in its export and import prices in March, with export prices falling 6.4%, after a 2.7% decline in the previous month,

That marked the seventh consecutive month of declines, and was the biggest drop since October 2020.

Import prices fell 6.9% - much steeper than February's 0.5% decline - making for 11 months of decline in a row, and the biggest fall since January 2021.

Finally on data, Australia’s unemployment rate remained unchanged in March at 3.5%, which was just ahead of market expectations for 3.6%.

The Australian Bureau of Statistics said employment increased by 31,700 people, or 0.2%, to end the month at 13.88 million.

Reporting by Josh White for Sharecast.com.