Asia report: Stocks weaker after Fed minutes, Samsung profits surge

Stock markets closed weaker across Asia on Thursday, following another negative session on Wall Street overnight, with Samsung in focus after reporting a 50% rise in quarterly profit.

In Japan, the Nikkei 225 was down 1.69% at 26,888.57, as the yen strengthened 0.08% on the dollar to last trade at JPY 123.70.

Of the major components on the benchmark index, robotics specialist Fanuc was down 1.115, Uniqlo owner Fast Retailing tumbled 3.36%, and tech investing giant SoftBank Group was 1.99% lower.

The broader Topix index was off 1.56% by the end of trading in Tokyo, settling at 1,892.90.

On the mainland, the Shanghai Composite fell 1.42% to 3,236.70, and the smaller, technology-centric Shenzhen Composite was 1.9% lower at 2,087.53.

South Korea’s Kospi was 1.43% weaker at 2,695.86, while the Hang Seng Index in Hong Kong was down 1.23% at 21,808.98.

The blue-chip technology stocks were mixed in Seoul, with SK Hynix up 0.44%, while Samsung Electronics slipped 0.73%.

Samsung’s losses came despite it reporting an estimated 50% year-on-year rise in first quarter operating profit.

The smartphone and consumer electronics giant estimated a profit of KRW 14.1trn (£8.84bn) in its latest guidance for 2022.

Sentiment in the region was dragged by a negative session stateside overnight, after the US Federal Reserve released the minutes from its March meeting.

The minutes showed policymakers were looking to unwind the central bank’s balance sheet by around $95bn per month, starting as soon as May.

They also left the option of multiple 50-basis point rate hikes on the table, as red-hot consumer inflation was proving more lasting than the Federal Open Market Committee previously expected.

Michael Hewson, chief analyst at CMC Markets, said the Fed’s unwinding plans appeared to be a consensus view, although some policymakers wanted to go further, with no limits on the speed of the runoff.

“Not surprisingly bond yields made new intraday highs, while US stocks hit their lows of the day before bouncing back, to close off their intraday lows, but still lower for the second day in a row,” he said.

“This weakness has translated into a weaker Asia session and as such looks set to see markets here in Europe also open lower later this morning.”

Oil prices continued their turbulent moves as the region went to bed, once again rising after retreating earlier in the day.

Brent crude futures were last up 0.7% on ICE at $101.78 per barrel, while West Texas Intermediate was ahead 0.74% at $96.94 on NYMEX.

In Australia, the S&P/ASX 200 shed 0.63% to 7,442.80, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.03% to 12,075.91.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.33% at AUD 1.3363, and the Kiwi retreating 0.19% to NZD 1.4486.