Asia report: Most markets fall, RBNZ hikes interest rates

Asia-Pacific stock markets mostly closed in the red on Wednesday, influenced by a turbulent session on Wall Street overnight with US debt ceiling talks ongoing.

However, New Zealand emerged as the outlier, following the country's central bank meeting market expectations with a 25-basis point interest rate hike.

“Asian equities mostly traded in the red, following the negative lead from Wall Street,” said TickMill market analyst Patrick Munnelly.

“Investor sentiment was affected by ongoing concerns over the US debt limit impasse, with only nine days remaining until the presumed ‘X-date’.

“Additionally, tensions between the US and China intensified after the US House China select committee chair called for retaliatory measures against China's ban on Micron.”

Most markets fall as debt ceiling discussions drag further

Japan's Nikkei 225 experienced a decline of 0.89%, ending the day at 30,682.68, with the Topix also down 0.42% at 2,152.40.

Among the big losers on Tokyo’s benchmark were Shiseido with a 5.63% decrease, CyberAgent dropping 4.7%, and Nippon Paper Industries witnessing a 4.32% fall.

Chinese stock markets too faced the heat with the Shanghai Composite falling 1.28% to 3,204.75, and the Shenzhen Component ending 0.84% lower at 10,920.33.

GuangDong Super Telecom had a rough day in Shanghai, plunging 10%, and Deluxe Family also experienced a setback, declining 6.38%.

Hong Kong's Hang Seng Index was not immune, dropping 1.62% to 19,115.93.

Real estate company Longfor Properties witnessed a substantial 7.88% decline, while Lenovo Group and Citic Pacific suffered losses of 7.65% and 5.68% respectively.

South Korea's Kospi remained almost unchanged with a slight dip of 0.004% to 2,567.45, with Seoul’s underperformers including Krafton, which fell 6.22%, and Naver Corporation, declining 4.25%.

Australia's S&P/ASX 200 closed down 0.63% at 7,213.80, as Lovisa Holdings led the losers, down 6.89%, and Eagers Automotive lost 4.89%.

Bucking the regional trend, New Zealand's S&P/NZX 50 ended the day 0.23% higher at 11,971.83, helped by a strong showing from Eroad, up 10.34%, and Summerset Group, which increased by 3.2%.

On the currency front, the yen was last 0.01% stronger on the dollar to trade at JPY 138.57, while the Aussie weakened 0.49% to AUD 1.5203, and the Kiwi retreated 1.82% from the greenback to change hands at NZD 1.6296.

Oil prices were in the green, with Brent crude futures last up 1.63% on ICE to $78.09 per barrel, and the NYMEX quote for West Texas Intermediate increasing 1.87% to $74.27.

RBNZ hikes interest rates again, manufacturer sentiment lifts in Japan

In economic news, the Reserve Bank of New Zealand announced its 12th consecutive upwards adjustment since October 2021, raising its official cash rate (OCR) by 25-basis points to 5.5%.

The decision met the expectations of economists surveyed by Reuters.

Five members of the RBNZ’s monetary policy committee voted in favour of the hike, with two voting against the move.

“The meeting has been interpreted very dovishly by the market, with the pricing of the peak policy rate declining from 5.95% to 5.62%,” said analysts at RaboResearch.

“The reason for this seems to relate to the fact that the two options discussed, and voted on, by the committee were a 25-basis point hike, or a hold.

“The committee agreed that neither decision would cause unnecessary instability in output, interest rates, or the exchange rate.”

RaboResearch said raising the OCR to 5.5% was consistent with projections.

“This reflects the view that while monetary policy is having a moderating effect on demand at this point in time, a 25-basis point increase in the OCR will increase confidence that inflation falls back to the midpoint of the target band.”

The Reserve Bank’s announcement came in the wake of a contraction in New Zealand's retail sector.

The volume of retail sales for the first quarter shrunk by 4.1% year-on-year according to the country’s statistics office, StatsNZ, marking the second quarter of decline following a 4% drop in the final quarter of 2022.

Adjusting for seasonal factors, StatsNZ said retail sales declined 1.4% quarter-on-quarter in the first quarter of 2023, coming off the back of a 1% decrease in the final quarter of last year.

Heading northwards to Japan, the economic mood among manufacturers was looking upbeat for the first time in 2023, according to the Reuters Tankan survey for May.

The sentiment index among large manufacturers rose to +6 - a positive shift from the -3 reported in April.

Additionally, Japan's service sector sentiment reached a five-month peak.

The Reuters Tankan poll reported a score of +25, marking its joint-highest level since February 2020.

Reporting by Josh White for Sharecast.com.

NIKKEI 225 -264.27 (-0.85%) 30,693.50

RISERS
Toyota Motor +5.36% JPY 1,956.5
Kansai Electric Power +4.93% JPY 1,617.0
Tokyo Electric Power +3.37% JPY 491.0
Inpex Corporation +2.98% JPY 1,553.0
Hitachi Construction Machinery +2.76% JPY 3,535.0

FALLERS
Shiseido -5.63% JPY 6,532.0
CyberAgent Inc -4.7% JPY 1,033.0
Nippon Paper Industries -4.32% JPY 1,218.0
Isetan Mitsukoshi Holdings -4.01% JPY 1,413.0
Keisei Electric Railway -3.72% JPY 5,170.0

SHANGHAI COMPOSITE -41.49 (-1.28%) 3,204.75

RISERS
Dalian Thermal Power +10.08% CNY 5.79
Guizhou Redstar Developing Co +10.04% CNY 13.48
Guangxi Guidong Electric Power +10.03% CNY 4.39
Hangzhou Electronic Soul Network Technology +10% CNY 50.29
Fujian Raynen Tech +9.99% CNY 17.83

FALLERS
GuangDong Super Telecom -10% CNY 31.49
Deluxe Family -6.38% CNY 3.08
Chongqing Taiji Industry Group -5.22% CNY 60.46
Guangzhou Baiyun International Airport -5.19% CNY 13.53
Flower King Eco-Engineering -4.94% CNY 4.43

HANG SENG INDEX -354.25 (-1.82%) 19,077.00

RISERS
Xinyi Solar +4.19% HKD 8.45
CK Infrastructure +2.3% HKD 42.20
CK Asset +2.11% HKD 43.55
CK Hutchison +1.24% HKD 48.95
Power Assets +1.07% HKD 42.55

FALLERS
Longfor Properties -7.88% HKD 16.14
Lenovo Group -7.65% HKD 7.24
Citic Pacific -5.68% HKD 9.64
Haidilao International -5.6% HKD 17.20
Sands China -5.35% HKD 24.75

KOSPI 100 -4.89 (-0.19%) 2,535.56

RISERS
Daewoo Shipbuilding +7.47% KRW 30,950
Orion +3.98% KRW 133,300
BGF Retail +3.48% KRW 190,200
Samsung Heavy Industries +2.81% KRW 6,210
Mirae Asset Daewoo Securities +2.46% KRW 7,510

FALLERS
Krafton -6.22% KRW 186,900
Naver Corporation -4.25% KRW 203,000
LG Household & Healthcare -3.93% KRW 562,000
KakaoBank -2.86% KRW 25,450
Hanmi Science -2.75% KRW 37,100

S&P/ASX 200 -46.10 (-0.64%) 7,213.80

RISERS
Webjet +3.84% AUD 7.58
Genesis Energy +2.38% AUD 2.58
Capricorn Metals +2.13% AUD 4.31
Qantas Airways +1.89% AUD 6.48
Fletcher Building +1.74% AUD 4.67

FALLERS
Lovisa Holdings -6.89% AUD 22.04
Eagers Automotive -4.89% AUD 12.85
Sayona Mining -4.55% AUD 0.21
Neuren Pharmaceuticals -4.38% AUD 13.74
Coronado Global Resources -4.17% AUD 1.38

S&P/NZX 50 +27.63 (+0.23%) 11,971.83

RISERS
Eroad +10.34% NZD 0.64
Summerset Group +3.2% NZD 9.03
Fletcher Building +2.68% NZD 4.98
Genesis Energy +2.21% NZD 2.77
Infratil +1.87% NZD 9.81

FALLERS
Synlait Milk -3.8% NZD 1.52
Serko -3.49% NZD 3.04
Restaurant Brands NZ -2.17% NZD 6.75
SkyCity Entertainment -1.72% NZD 2.28
Stride Property -1.52% NZD 1.30