Asia report: Stocks mixed after Powell comments, China closed

Stock markets across the Asia-Pacific region ended Thursday's trading in mixed terrain, as investors digested overnight comments from US Federal Reserve Chairman Jerome Powell regarding additional rate hikes expected this year.

“Asian equity markets traded mostly lower as market participants reacted to the tech-driven declines on Wall Street,” said TickMill Group market analyst Patrick Munnelly.

“Investors were also digesting a series of statements from the Federal Reserve and the release of hot UK consumer price index data, which added to the cautious sentiment.

“Additionally, risk appetite was constrained by key holiday closures, with markets across the Greater China region closed for the Dragon Boat Festival.”

Munnelly noted that the Nikkei 225 index traded with a negative bias, although the downside was limited by recent currency weakness.

“Furthermore, comments from Bank of Japan board member Noguchi echoed the dovish tone of the central bank, emphasising the commitment to maintaining accommodative policy.

“Noguchi highlighted the importance of ensuring sustainable wage growth by persisting with easy monetary policy.”

Regional stocks mixed in anticipation of further US hikes

The Japanese market saw varied results with the benchmark Nikkei 225 index down by 0.92% at 33,264.88 points, while the broader Topix index inched up by 0.07% to 2,296.50.

Notable declines on Tokyo’s benchmark included Advantest Corporation, which dropped by 6.86%, Tokyo Electron by 4.57%, and Shiseido by 4.12%.

In South Korea, the Kospi index defied the broader trend, gaining 0.43% to end at 2,593.70 points.

Several stocks made significant strides, with Samsung Engineering up by 3.74%, Hybe by 3.54%, and Posco Holdings by 3.53%.

In contrast, Australia's S&P/ASX 200 index faced a rough day, tumbling by 1.63% to close at 7,195.50 points.

The notable losers in Sydney included Johns Lyng Group, which plunged by 11.93%, Gold Road Resources by 8.31%, and Virgin Money UK by 5.69%.

New Zealand's S&P/NZX 50 index dipped slightly by 0.32% to end at 11,739.05 points.

Shares of Pacific Edge tanked by 12.94%, while Stride Property and Heartland Group fell by 2.88% and 2.37% respectively.

Investors in mainland China and Hong Kong did not participate in Thursday’s trading due to the celebration of the Dragon Boat Festival, leading to a more quiet session overall.

In currency markets, the yen was last 0.07% weaker against the dollar at JPY 141.98, while the Aussie was off 0.15% to trade at AUD 1.4734.

Conversely, the Kiwi strengthened on the greenback, and was last ahead 0.08% to change hands at NZD 1.6110.

Oil markets meanwhile saw a slight downturn, with Brent crude futures last falling 0.77% on ICE at $76.53 per barrel, and the NYMEX quote for West Texas Intermediate declining by 0.73% to $72.00.

Philippine and Indonesian central banks maintain rates

In economic news, both the Philippine and Indonesian central banks kept their policy interest rates steady in their latest meetings.

Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, held its benchmark rate at 6.25% for the second consecutive time on Thursday.

The pause followed its decision to halt increases in May, marking a period of stabilising monetary policy.

It remained the highest interest rate level the nation had encountered since May 2007.

Meanwhile, Bank Indonesia (BI) kept its key policy rate steady for the fourth month in a row, maintaining its seven-day reverse repurchase rate at 5.75%.

Moreover, the central bank held firm its deposit facility rates and lending facility rates at 5% and 6.5% respectively, reinforcing its steady stance on monetary policy.

Reporting by Josh White for Sharecast.com.