Asia report: Markets mixed as oil prices take a tumble
By Josh White
Date: Monday 09 Aug 2021
(Sharecast News) - Markets in Asia were in a mixed state as they closed on Monday, with much attention on oil prices, as benchmark crude tumbled through the session.
Japan's bourse was closed for the Mountain Day holiday, as the yen strengthened 0.11% on the dollar to last trade at JPY 110.13.
On the mainland, the Shanghai Composite was 1.05% firmer at 3,494.63, and the smaller, technology-heavy Shenzhen Composite added 0.81% to 2,462.84.
Export growth in China slowed in July, falling short of expectations, while imports also lost their oomph.
The country reported a 19.3% rise in exports year-on-year for the month, slowing from the 32.2% surge in June and missing Reuters-polled forecasts for a rise of 20.8%.
Imports, meanwhile, were up 28.1%, coming in below expectations for a 33% rise.
Consumer inflation, meanwhile, slowed in July, with China's consumer price index rising 1% year-on-year.
That was just below the 1.1% recorded in June, and well short of Beijing's current-year target for inflation of 3%.
"Food deflation deepened sharply, thanks to base effects in pork prices, as well as a further m/m fall," said Pantheon Macroeconomics chief Asia economist Freya Beamish.
"The correction here should soon be over, especially as the declines have triggered purchases from the state reserve.
"But the drag on the headline isn't quite finished yet."
Beamish said the People's Bank, however, was unlikely to pay much heed to that.
She described services inflation as "more important", noting that it picked up to 1.6% from 1.0%, as expected, aided by base effects, with month-on-month prices maintaining their pace.
"The Covid drag is lifting, with touring and outing inflation jumping.
"Residence inflation also continued picking up, in line with the previous loosening of financial conditions, and likely has a way to go yet."
The inflation data overall suggested that the People's Bank of China would continue to "err on the hawkish side", Freya Beamish said, though it would tread carefully through the 'Delta' variant scare.
"A further reserve requirement ratio (RRR) cut is looking likely this year, but that reflects liquidity management, rather than an attempt to push down interbank rates."
South Korea's Kospi was off 0.3% at 3,260.42, while the Hang Seng Index in Hong Kong rose 0.4% to 26,283.40.
The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics finishing flat, while SK Hynix slipped 1.69%.
Oil prices were still on the back foot as the region clocked off, with Brent crude last down 4.2% at $67.73 per barrel, and West Texas Intermediate losing 4.5% to $65.21.
In Australia, the S&P/ASX 200 closed flat at 7,538.40, after the country reported 280 new cases of Covid-19, with the bulk of them in the state of New South Wales, which contains the country's economic centre of Sydney.
Around 60% of Australia's population is currently under some form of lockdown, as the federal and state governments grapple with a growing number of 'Delta' variant infections and a slow, politically-contentious rollout of vaccines.
Across the Tasman Sea, New Zealand's S&P/NZX 50 was 0.54% lower at 12,700.83, after the yield on the 10-year 'Kiwi Bond' government note rose to 1.63%.
That came on the back of a rise in yields for US Treasury bonds on Friday, following some well-received nonfarm payrolls data stateside.
The down under dollars were both weaker on the greenback, with the Aussie last off 0.21% at AUD 1.3616, and the Kiwi retreating 0.02% to NZD 1.4267.
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