Asia report: Most markets higher, RBNZ stands pat on rates
By Josh White
Date: Wednesday 23 Sep 2020
(Sharecast News) - Markets in Asia finished mostly higher on Wednesday, as investors digested the latest comments from the chair of the US Federal Reserve, and New Zealand's central bank stood pat on interest rates.
In Japan, the Nikkei 225 was down 0.06% at 23,346.49, having returned from a two-day holiday, as the yen weakened 0.06% against the dollar to last trade at JPY 104.99.
Of the major components on the benchmark index, automation specialist Fanuc was down 0.63%, fashion firm Fast Retailing lost 0.39%, and technology conglomerate SoftBank Group was 2.6% weaker.
The broader Topix index was off 0.13% by the end of trading in Tokyo, closing at 1,644.25.
On the mainland, the Shanghai Composite added 0.17% to 3,279.71, and the smaller, technology-heavy Shenzhen Composite was ahead 0.83% at 2,202.18.
South Korea's Kospi managed gains of 0.03% to 2,333.24, while the Hang Seng Index in Hong Kong rose 0.11% to 23,742.51.
Both of the blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 0.69% and SK Hynix adding 2.83%.
Investors spent the early parts of the Asian session digesting Fed chair Jerome Powell's prepared testimony overnight, in which he said the central bank was prepared to support the economy for as long as necessary.
"Many economic indicators show market improvement," he said, adding that the way forward economically remained "highly uncertain".
Oanda senior Asia-Pacific market analyst Jeffrey Halley said that after a multi-day losing streak, the "fear of missing out" crowd were keen to click the buy button again, with Powell and the Richmond Fed giving them the right excuse on an otherwise quiet news day.
"Notably, other asset markets have not followed suit," he noted.
"The US dollar diverged by continuing to gain strength, and precious metals and oil markets eased lower once again."
Rising cases of Covid-19 were also at the fore of investors' minds, with cases in the US beginning to trend upwards following several weeks of declines.
Data overnight also showed that the number of coronavirus-related deaths in the US had now topped 200,000.
In the UK, prime minister Boris Johnson addressed the nation in a televised statement on Tuesday night, bringing in some fresh lockdown measures after a surge in infections in Britain.
Oil prices were higher as the region went to bed, with Brent crude last up 0.53% at $41.94 per barrel, and West Texas Intermediate ahead 0.4% at $39.96.
In Australia, the S&P/ASX 200 leapt 2.42% by end-of-play, settling at 5,923.90, as the hefty financials subindex added 2.18%.
The country's big four banks were in the green, with Australia and New Zealand Banking Group up 2.37%, Commonwealth Bank of Australia adding 1.9%, National Australia Bank rising 2.88%, and Westpac Banking Corporation ahead 2.12%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 added 0.82% to 11,704.62, as the country's central bank kept its official cash rate at a record low 0.25%.
The Reserve Bank of New Zealand also extended its quantitative easing programme, confirming another NZD 100bn of government bond buying between now and June 2022.
"The RBNZ overnight unchanged on policy settings as expected," noted SquaredFinancial chief market analyst Rony Nehme.
"They maintained a dovish tone reaffirming that [the] funding for lending programme, a lower or negative official cash rate, purchases of foreign assets, and interest rate swaps remain under consideration."
The down under dollars were both weaker on the greenback, with the Aussie last off 0.62% at AUD 1.4035, and the Kiwi retreating 0.52% to NZD 1.5151.
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