Asia report: Most markets higher, China services growth slows

Markets in Asia closed mostly higher on Wednesday, as investors digested the latest data on China’s services sector.

In Japan, the Nikkei 225 was up 1% at 28,646.50, as the yen weakened 0.08% against the dollar to last trade at JPY 105.06.

Of the major components on the benchmark index, automation specialist Fanuc was up 0.55%, fashion firm Fast Retailing added 0.75%, and technology conglomerate SoftBank Group was 1.78% firmer.

The broader Topix index was 1.3% firmer by the end of trading in Tokyo, closing at 1,871.09.

On the mainland, the Shanghai Composite was down 0.46% at 3,517.31, and the smaller, technology-heavy Shenzhen Composite was 0.87% weaker at 2,380.79.

The unofficial Caixin/Markit services purchasing manager’s index (PMI) cme in at 52 for January, making for the slowest rate of expansion in nine months, and down from a December figure of 56.3.

It was still above the 50-point mark that separates expansion from contraction, however.

South Korea’s Kospi gained 1.06% to 3,129.68, while the Hang Seng Index in Hong Kong managed gains of 0.2% to 29,307.46.

Shares in Chinese technology behemoth Alibaba were up 0.38% in the special administrative region, after it reported its first profits from its cloud operations.

A report from CNBC also suggested the firm was considering raising up to $5bn in dollar-denominated bonds.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics up 0.24%, and SK Hynix closing flat.

Korean carmaker Kia Motors rocketed 9.65% after a report from local media said the company was preparing to sign a KRW 4trn deal with California-based consumer technology giant Apple to build electric automobiles.

“Risk appetite remains buoyant on hopes for US fiscal stimulus, diminishing fears about retail trading dislocation and better US vaccination roll-out and hopes for improved global vaccine distribution,” said Axi chief global market strategist Stephen Innes.

“The overnight market has taken a bit of a pause after but its hardly the end of the rosy reopening story.”

Innes said that, even if economic data wobbled, the major central banks remained committed to keeping financial conditions “comfortable” for months to come.

“Meanwhile, the vaccine narrative has such a long runway for catalyst evolution through the end of 2021 that as consensus as it may already be, it is difficult for prices to have fully reflected it all this far in advance.”

Oil prices were higher at the end of the Asian day, with Brent crude last up 0.89% at $57.97 per barrel, and West Texas Intermediate gaining 0.71% to $55.15.

In Australia, the S&P/ASX 200 added 0.92% to 6,824.60, while across the Tasman Sea, New Zealand’s S&P/NZX 50 rose 0.36% to 13,091.21.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.15% at AUD 1.3125, and the Kiwi advancing 0.11% to NZD 1.3886.