Asia Summary
Following the negative leads out of the US, Asian equity markets opened mostly lower. The Nikkei 225 opened down by 0.1%, amid weakness in shares of Fast Retailing.
However, the index has since pared losses as it attempts to gain for the 16th straight session. Japanese ‘mega-banks’ have added on to their post-elections gains. Strength has also been seen among steel makers and trading companies. Japanese electronic parts makers are trading mostly higher, after it was reported that Q2 orders for the sector may have risen by 17%.
In the tech sector, Rakuten has declined by over 2% following a cautious broker note. South Korean chipmaker Hynix has declined by over 2%, after gaining over 4% in the prior session.
Banks in South Korea have rebounded on today’s session, following the weakness seen yesterday and rise in government bond yields. Korea’s 3-year bond yield has risen over 3bps on the session.
Energy companies in Australia are generally trading lower following yesterday’s decline in oil prices. Shares of Santos have declined by over 0.5%. Japara Healthcare has gained over 7% in Sydney, after Moelis Australia disclosed an ~10% stake.
The Hang Seng opened the session lower, as furniture products firm Man Wah Holdings has lost over 15%, after cutting its forecast, primarily due to the appreciation of the Chinese yuan. The index has since pared losses. The Property and Construction sub-index has risen by over 0.5% on the session.
In currencies, the Kiwi has moved between gains and losses, as the new Labour/NZ First coalition government outlined some of its priorities, which include a higher minimum wage, review of the RBNZ’s mandate and a ban on the purchase of existing homes by foreigners.
Looking, ahead the Aussie has traded slightly higher ahead of tomorrow’s release of Q3 CPI data. Japanese companies expected to report earnings today include Canon and Nidec. Out of China, companies including CNOOC, China CITIC Bank and China Shipbuilding Group may report earnings.
US companies expected to report today include 3M, AT&T, Biogen, Caterpillar, Chipotle, Corning, GM, Lockheed Martin and McDonald’s. Following Monday’s US equity close, Whirlpool declined by over 6%, after reporting weaker than expected quarterly results and reducing its FY outlook.
Key economic data
(JP) JAPAN OCT FLASH PMI MANUFACTURING: 52.5 V 52.9 FINAL
Speakers and Press
Japan
(JP) Japan Econ Min Motegi: To host next round of TPP talks Oct 30-Nov 1st
(JP) Japan Fin Min Aso: Markets support Govt’s economic policies; Election results saw stocks go up
(JP) Japan Electronic Parts Makers Q2 Orders +17% y/y to ¥1.57T (quarterly record)- Japanese Press
Korea
(KR) South Korea, US and Japan start joint missile warning exercise
China/Hong Kong
(CN) Singapore SGX official: Seeing less China intervention in yuan market since 2016
(CN) China President Xi ideology to enter the constitution as "Xi Jiping Thought" and elevate him to the same level as Mao and Deng Xiaoping – press
(CN) China President Xi now included in draft version of amended China Communist Party constitution; Adds Xi Jing Ping thought into charter – Chinese press
(CN) The gap between China aggregate financing and M2 money supply rise will narrow – Chinese press
(HK) Hong Kong Monetary Authority (HKMA) said the discount between HKD Hibor and USD Libor is not of concern
Australia/New Zealand
(NZ) New Zealand Labour Leader Ardern signs coalition agreement with NZ First: You will see significant increase in minimum wage
Asian Equity Indices/Futures (00:00ET)
Nikkei +0.04%, Hang Seng +0.03%; Shanghai Composite +0.08%; ASX200 -0.0%, Kospi +0.2%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 +0.1%
FX ranges/Commodities/Fixed Income (00:00ET)
EUR 1.1770-1.1747; JPY 113.49-113.25; AUD 0.7825-0.7807;NZD 0.7004-0.6935
Dec Gold +0.2% at $1,283/oz; Dec Crude Oil +0.2% at $51.98/brl; Dec Copper +1.3% at $3.22/lb
USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6268 V 6.6205 PRIOR
(CN) PBoC OMO: Injects CNY250B in 7 and 14-day reverse repos v CNY200B injected prior; injects net CNY140B v CNY140B prior (6th consecutive injections, longest since July)
(TH) Thailand Central bank sells combined THB60B in 3-month and 6-month bonds
Equities notable movers
Australia/New Zealand
ESV.AU Completes ~£15.8M institutional component of entitlement offering; +21%
MML.AU Reports Q1 gold production 24.9K oz v 23.8K q/q at avg head grade of 6.59 g/t; ASIC $973/oz v $1,180 q/q; +15.6%
KGN.AU CEO Ruslan Kogan sells 3M shares at A$4.25/shr; -13%
China/Hong Kong
606.HK Announces intent to sell COFCO Biofuel and COFCO Biochemical for HK$8.58B; declares special dividend; +8.5%
1999.HK Issues profit warning; sees H1 -10% profit y/y – filing; -16.5%
Korea
005930.KR Said to consider plan to spend KRW20T on dividends and buybacks in 2017 – South Korean Press
Japan
2432.JP Strength attributed to Nintendo’s announcement on Animal Crossing; +7%
6502.JP CEO: Considering measures if chip unit sale is not completed by the end of March; -0.6%
