INGOT Brokers AU | Asian market report (2017-09-05)

Asian market report (2017-09-05)

Overview

Rising tensions in the region have led to mixed signals that affected the stock markets. The pressures on North Korea from neighboring countries, among others, have been affecting the economies and the currencies of the respective countries.

In Far East Asia, the latest intensification of the crisis came when Pyongyang announced it had directed a sixth nuclear test, which it claimed was of a hydrogen bomb. The claim has not been independently verified, but some data indicated that the weapon was the most powerful ever to be detonated by Pyongyang.

China's Shanghai Composite edged up by 0.14 percent to 3,384.32, extending gains for a third straight session as a private business survey showed activity in China's services sector expanded at a faster pace in August, Shenzhen composite adding 4.02 points to 1,972.14 and ending higher at 27,714.35.

Meanwhile, South Korea’s Kospi lost 3 points to finish at 2,326.62 in a volume lacking trading session due to the rising geopolitical tensions.

 

Japan Stock Market

Japanese equities fell to their one-week low as they fell under pressure from rising tension in the area, with stock market index Nikkei 225 shading 0.63 percent to settle at 19,385.81.

Government reports stated that it is drafting a plan to bring thousands of South Korea-based nationals to safety in the event of a military conflict with North Korea.

The automakers were mixed despite the strong sales in August, with Toyota rising by 0.81 percent, Honda gaining 0.23 percent and Mazda losing 0.95 percent.

Toyota sales in China rose 13.2 percent in August compared to a year ago. Moreover, Honda sales picked up 20.6 percent while Mazda sales climbed 8.4 percent.

The Japanese Yen continued to strengthen due to the significant demand for the safe heaven thus weighing on the country’s equities.

 

Australian Stock Market

On the other hand, Australian equities settled marginally higher, led by the gains in the mining and energy sectors after the positive activity, exports and consumer confidence data. In the mining sector, BHP Billiton, Fortescue Metals, and Rio Tinto all were gainers, adding between 0.5 to 0.9 percent, as for Beach Energy it increased by 3 percent.

Meanwhile, as a sign of the housing market slowdown, the 13th-month record low of the Reserve Bank rate was kept unchanged.  Early losses affected the Commonwealth Bank. However, these losses have been erased and closed with a gain of 0.2%. This was mainly effected by the global litigation funder backing a shareholder class action against the alleged breaches of AML and counter terrorism funding laws.

The AUD was affected negatively, even though the country produced positive results, the AUD closed close to its low at 0.7943. The real fundamental impact will be highlighted with the sharp changes of the EUR/AUD and AUD/NZD.

 

 

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