Asia report: Stocks mixed as China concerns still weigh

Stocks were mixed by the close in Asia on Tuesday, with Hong Kong leading the losses as concerns over a new rise in Covid-19 infections in China dragged on sentiment.

In Japan, the Nikkei 225 was up 0.61% at 28,115.74, as the yen strengthened 0.6% on the dollar to last trade at JPY 141.29.

Robotics specialist Fanuc was up 0.44%, while Uniqlo owner Fast Retailing was down 0.89% and tech investing giant SoftBank Group slipped 0.15%.

The broader Topix index was ahead 1.12% by the end of trading in Tokyo, settling at 1,994.75.

On the mainland, the Shanghai Composite eked out gains of 0.13% to 3,088.94, and the technology-centric Shenzhen Component slid 1.18% to 11,002.93.

A fresh increase in Covid-19 infections and the first deaths from the virus in several months in China had investors concerned, especially after authorities in Beijing reiterated their controversial ‘zero-Covid’ policies.

Additionally, both the People’s Bank of China and the China Banking and Insurance Regulatory Committee told banks overnight to expand their lending support to the country’s economy.

“We will make every effort to provide financial services to stabilise investment, promote consumption, and ensure people’s livelihood,” the two organisations said in their joint statement, according to Reuters.

“We will boost credit support to key areas, weak links, and sectors affected by the Covid-19, and make every effort to promote further economic recovery.”

South Korea’s Kospi was 0.59% lower at 2,409.27, while the Hang Seng Index in Hong Kong was 1.31% weaker at 17,421.41.

Chinese e-commerce giant JD.com was down 4.36% by the end of trading in the special administrative region, after the company announced pay cuts for its senior management.

It said it would trim 20% off its senior managers’ salaries from January.

Seoul’s blue-chip technology stocks were in the red, with Samsung Electronics down 1.3% and SK Hynix losing 1.27%.

“European markets underwent a lacklustre start to the week, following on from Asia markets, after China reported its first Covid related deaths since April, prompting broad risk off weakness across markets as well as a sell-off in crude oil over demand concerns,” said CMC Markets chief market analyst Michael Hewson of the global situation on Tuesday morning.

“Prices in Brent crude weren’t helped by reports that Saudi Arabia supported the idea of a production increase, sending Brent prices to their lowest levels since January, a claim that was subsequently denied after European markets had closed, pulling crude prices off their lows of the day.

“US markets also slipped back weighed down by a strong move higher in the dollar which appeared to be a reaction to the deterioration of sentiment in China as well as some follow through from last week’s comments from St. Louis Fed President James Bullard about a higher terminal rate being needed if inflationary pressures remained high.”

Oil prices had bounced back into the green as the region went to bed, with Brent crude futures last up 0.64% on ICE at $88.01 per barrel, and West Texas Intermediate rising 0.59% to $80.51 on NYMEX.

In Australia, the S&P/ASX 200 added 0.59% to 7,181.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.17% to 11,420.42.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.54% at AUD 1.5059, and the Kiwi advancing 0.71% to NZD 1.6274.

Reporting by Josh White for Sharecast.com.