Asia report: Most markets lower, China keeps rates on hold

Most markets in Asia closed in the red on Monday, led by stocks in mainland China, as that country sated expectations by leaving interest rates on hold.

In Japan, the Nikkei 225 was up 0.46% at 30,156.03, as the yen weakened 0.19% against the dollar to last trade at JPY 105.65.

Automation specialist Fanuc was down 0.93%, while among the other major components on the benchmark index, fashion firm Fast Retailing was up 0.14% and technology conglomerate SoftBank Group was 1.74% higher.

The broader Topix index was 0.49% firmer by the end of trading in Tokyo, closing at 1,938.35.

On the mainland, the Shanghai Composite was down 1.45% at 3,642.44, and the smaller, technology-heavy Shenzhen Composite was 2.11% weaker at 2,416.67.

China stood pat on interest rates during the day, as markets had anticipated, with the one-year loan prime rate staying at 3.85%.

The five-year loan prime rate was also on hold, at 4.65%.

“The People’s Bank of China is expected to kick off the week by leaving its loan prime rates unchanged, seeking to safeguard its recovery path until the pandemic risks have further abated,” said IHS Markit chief business economist Chris Williamson ahead of the decision.

South Korea’s Kospi was off 0.9% at 3,079.75, while the Hang Seng Index in Hong Kong was 1.06% lower at 30,319.83.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics down 0.48%, while SK Hynix rose 2.63%.

Oil prices were higher at the end of the Asian day, with Brent crude last up 0.57% at $63.27 per barrel, and West Texas Intermediate rising 0.52% to $59.57.

In Australia, the S&P/ASX 200 lost 0.19% to 6,780.90, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slid 0.98% to 12,426.24.

Central bankers are meeting in Wellington in the coming week, with expectations that interest rates in the island nation will remain at their record lows.

“No change is also anticipated at the Reserve Bank of New Zealand, according to the consensus, where the policy rate is expected to remain at an historic low of 0.25% for some time to come,” IHS Markit’s Williamson added.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.11% at AUD 1.2694, and the Kiwi advancing 0.15% to NZD 1.3681.