Asian stocks ended mixed near three-month lows on Wednesday as higher U.S. bond yields, uncertainty about the timing of a Fed rate increase and the apparent lack of progress in talks between Greece and its creditors kept investors on edge.
Chinese and Hong Kong shares drifted lower after index provider MSCI Inc. said it would hold off including China-listed shares in its Emerging Markets Index until a few important remaining issues related to market accessibility are resolved.
China’s benchmark index Shanghai Composite edged down 7.50 points or 0.15 percent to 5,106.04. Shares of China National Nuclear Power, a subsidiary of one of the country’s two state-owned nuclear reactor builders, soared 44 percent on its debut on the Shanghai Stock Exchange, helping ease investor disappointment over MSCI’s decision to some extent.
Hong Kong’s Hang Seng index dropped 301.88 points or 1.12 percent to close at 26,687.64, a two-month low, after a 22-year-old woman was rushed to a Hong Kong hospital Wednesday on suspicion she had contracted the potentially deadly MERS virus.
Japanese shares fell for a fourth consecutive session, as the yen strengthened after Bank of Japan Governor Haruhiko Kuroda said a further decline in the currency is “unlikely” on a real effective exchange rate basis because it is already very weak. The yen rose more than one percent against the dollar and the euro, leaving investors in a tizzy.
The benchmark Nikkei average fell 49.94 points or 0.25 percent to close at 20,046.36, its lowest level since May 19, while the broader Topix index closed down 0.38 percent at 1,628.23.
Investors ignored positive data that showed Japan’s core machinery orders unexpectedly jumped 3.8 percent in April from the previous month, in a sign that companies may be boosting capital expenditure. The headline figure beat forecasts for a decline of 1.8 percent after a 2.9 percent gain in March. On a yearly basis, core machine orders added 3.0 percent, topping expectations for a 1.4 percent decline.
Among the worst performers, West Japan Railway, Isuzu Motors and Nissan Chemical Industries fell 3-4 percent. Banks and brokerages fell, with Mitsubishi UFJ Financial Group, Mizuho Financial and Nomura Holdings closing down between 0.8 percent and 1.4 percent. Mitsui Mining and Smelting topped the buying list with a 5.6 percent gain, while Sumitomo Metal Mining, KDDI Corp and Mitsubishi Materials Corp climbed 2-4 percent.
Australian shares swung between gains and losses before closing marginally firmer despite weak consumer confidence data and a downbeat speech from Reserve Bank of Australia governor Glenn Stevens leaving open the possibility of another rate cut to sustain growth. The benchmark S&P/ASX 200 index closed up 7 points or 0.1 percent at 5,478.60.
A measure of Australian consumer sentiment tumbled in June, reversing the previous month’s promising increase, on the back of broader concerns about the outlook for the economy, the latest survey from Westpac Bank and the Melbourne Institute showed. The index fell by 6.9 percent in June to a score of 95.3, following a 6.4 percent spike in May to 102.4.
Miners turned in a mixed performance, with BHP Billiton rising 0.2 percent, while Rio Tinto shed half a percent and Fortescue Metals Group tumbled 2.5 percent. Newcrest Mining gained 0.8 percent and rival Evolution Mining rallied 1.8 percent after gold prices rose overnight on a weaker dollar.
Lender Westpac closed marginally higher after announcing plans to revamp its retail and business banking units. Commonwealth edged up 0.1 percent and NAB advanced 0.7 percent, while ANZ eased 0.2 percent. In the oil sector, Santos, Woodside Petroleum and Oil Search rose 1-3 percent. Crude oil prices jumped more than 3 percent on Tuesday, with expectations of another weekly drop in U.S. stockpiles and a weaker dollar underpinning prices.
Retailer Myer Holdings dropped 1.9 percent, Harvey Norman fell 1.7 percent and JB Hi-Fi retreated 3.6 percent on the back of the disappointing consumer confidence data. Qantas Airways slipped 0.3 percent on news that it will operate a direct flight from Los Angeles to Sydney for the first time.
Seoul shares fell notably as concerns over the fallout of the Middle East Respiratory Syndrome (MERS) weighed on tourism-related stocks. Two more deaths were reported on Wednesday, bringing to nine the total number of deaths in the current outbreak. The benchmark Kospi average fell 12.71 points or 0.62 percent to 2,051.32. Leading carrier Korean Air Lines plummeted 4.3 percent, while smaller rival Asiana Airlines slumped 6.8 percent. Market bellwether Samsung Electronics dropped 1.6 percent, extending Tuesday’s 2 percent loss.
In economic news, South Korea’s jobless rate edged down to 3.8 percent last month from 3.9 percent in April as more people were hired in the manufacturing and service sectors, official data showed. The number of employed people stood at 26.18 million, up from 25.9 million in April, with 379,000 new jobs being created from a year earlier, marking the largest monthly job creation in five months.
New Zealand shares fell sharply after Orion Health revealed a delay to an expected contract signing with a United States health insurer. While Orion shares plunged 9.7 percent to a record low, the benchmark NZX-50 index dropped 58.24 points or 0.99 percent to close at 5,803.87. Energy shares such as Meridian Energy, Mighty River Power and Contact Energy fell about 3 percent each after a fresh wave of selling swept through government bond markets on both sides of the Atlantic on Tuesday.
National carrier Air New Zealand slumped 5 percent to one-month low after rival Qantas announced a deal with American Airlines to strengthen their trans-Pacific partnership. Units of Fonterra Shareholders Fund eased 0.2 percent. The world’s largest dairy exporter said it would lay off hundreds of employees at its head office and support functions as part of a restructuring which will be unveiled to the Fonterra board next week.
In economic releases, the value of core retail spending, which strips out fuel and vehicle related items, rose 0.4 percent to $3.9 billion in May after a 0.9 percent fall in April, Statistics New Zealand data showed.
India’s Sensex was up over 300 points or 1 percent, snapping its six-day losing streak, as MSCI’s decision not to include China-listed shares in one of its key benchmark indexes eased worries over short-term capital flight.
Elsewhere, the benchmark indexes in Indonesia, Malaysia, Singapore and Taiwan were up between 0.4 percent and 1.2 percent.
U.S. stocks ended a choppy session largely unchanged overnight, although the S&P 500 snapped a three-day losing streak, led by gains in financial and consumer staples shares. Treasury bond yields resumed their upward trend and food distributor United Natural Foods reported disappointing results, offsetting news of a big General Electric asset sale and encouraging data on job openings, small business confidence and inventories.