Asia report: Markets finish mixed as China services growth slows
By Josh White
Date: Wednesday 05 Aug 2020
(Sharecast News) - Markets in Asia finished in a mixed state on Wednesday, as investors kept their wallets closed awaiting news of a Covid-19 stimulus deal stateside, while fresh data showed a slowing in the expansion for China's services sector in July.
In Japan, the Nikkei 225 was down 0.26% at 22,514.85, as the yen strengthened 0.03% against the dollar to last trade at JPY 105.69.
Of the major components on the benchmark index, automation specialist Fanuc was down 0.16%, fashion firm Fast Retailing lost 0.51%, and technology conglomerate SoftBank Group slid 4.19%.
The broader Topix index was off 0.04% by the end of trading in Tokyo, closing at 1,554.71.
On the mainland, the Shanghai Composite was ahead 0.17% at 3,377.56, and the smaller, technology-heavy Shenzhen Composite was 0.8% firmer at 2,318.93.
The latest unofficial Caixin/Markit services purchasing managers' index came in at 54.1 for July during the session, which was lower than the 58.4 reading for June, but still above the 50-point mark that separates expansion from contraction.
It suggested a slower expansion for the sector when compared to June.
South Korea's Kospi rose 1.4% to 2,311.86, while the Hang Seng Index in Hong Kong added 0.62% to 25,102.54.
Both of the blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 0.7% and SK Hynix losing 1.1%.
Investor attention remained focussed across the Pacific in the early parts of the session, as lawmakers in Washington remained in disagreement over a fresh coronavirus stimulus package.
At the same time, reports emerged that China and the United States were going to review their first phase trade deal in the middle of the month.
Reuters, citing people "familiar" with the matter, said US Trade Representative Robert Lighthizer and China Vice-premier Liu He would be involved in the meeting.
The ongoing uncertainty in global markets saw gold prices continue to surge, with spot gold settling above $2,000 per ounce for the first time as investors clambered for the yellow metal's safe haven.
Spot gold was last trading 0.88% higher at $2,037.06 per ounce.
"While US markets continue to break records with another record high for the Nasdaq, as well as a record close for the NYSE FANG+ Index, markets elsewhere have struggled to keep up as concerns grow about the resilience of the ongoing economic rebound," said CMC Markets chief market analyst Michael Hewson.
"Asia markets have been mixed after the latest China Caixin services PMI fell back more than expected in July, coming in at 54.1, down from June's 58.4, with the Nikkei 225 struggling to make much headway."
Hewson noted that the price of gold had broken above the "totemic" $2,000 an ounce level for the first time ever.
"The rip through $2,000 an ounce has been prompted by further declines in US two- and five-year yields, which are trading at new record lows below 0.2%, thus making the yellow metal much more attractive in terms of a longer term investment."
Oil prices were higher as the region went to bed, with Brent crude last up 1.46% at $45.08 per barrel, and West Texas Intermediate rising 1.51% to $42.33.
In Australia, the S&P/ASX 200 lost 0.6% to close at 6,001.30, while across the Tasman Sea, New Zealand's S&P/NZX 50 slipped 0.12% to 11,757.72.
Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.52% at AUD 1.3892, and the Kiwi advancing 0.45% to NZD 1.5032.
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