Asian shares were mostly lower on Thursday after a weak session on Wall Street, though Southeast Asian markets gained following recent rallies in oil prices. Tokyo shares fell as the yen remained at a relatively high level versus the dollar, hurting prospects for exporters’ profits.
KEEPING SCORE: Japan’s Nikkei 225 stock index fell 0.4 per cent to 16,521.81, while the Hang Seng index of Hong Kong dropped 0.5 per cent to 19,949.02. South Korea’s Kospi lost 0.1 per cent to 1978.51 and Australia’s S&P/ASX 200 fell 0.5 per cent to 5,348.00. Taiwan fell but most benchmarks in Southeast Asia rose.
WALL STREET: A rout in retail stocks pulled U.S. indexes down on Wednesday. The Dow Jones industrial average sank 217.23 points, or 1.2 per cent, to 17,711.12. The Standard & Poor’s 500 index fell 19.93 points, or 1 per cent, to 2,064.46. The Nasdaq composite index lost 49.19 points, or 1 per cent, to 4,760.69.
TOYOTA PROFIT: Shares in Toyota Motor Corp. fell 2.9 per cent after a 6.1 per cent drop overnight in New York. On Wednesday, the company projected a 35 per cent plunge in profit for the fiscal year through March 2017, as the perks of a favourable exchange rate fade, and it reported a 4 per cent drop in profit for January-March on-year at 426.6 billion yen ($3.9 billion). Other exporters can expect similar woes thanks to the yen’s recent gains against the U.S. dollar.
ANALYST VIEWPOINT: “Regional indications point to a calm day, with modest gains in Hong Kong offset by minor losses in Tokyo. Forex markets remain becalmed, with little macro data to spur moves,” Michael McCarthy of CMC Markets said in a commentary.
OIL PRICES: Already trading at its highest price in six months, benchmark U.S. crude rose again after the government reported a surprise decline of 3.4 million barrels in supplies for last week and a 6 per cent reduction in U.S. oil output. U.S. oil fell 22 cents to $46.01 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.57, or 3.5 per cent, to $46.23 a barrel on Wednesday. Brent crude, the international benchmark, fell 21 cents to $47.39 a barrel. It had jumped $2.08, or 4.6 per cent, to $47.60 a barrel in London.
CURRENCIES: The dollar rose to 108.60 yen from 108.40 in the previous session. The euro was flat at $1.1424. The yen-dollar rate has “slipped back down to 108 levels, as a short-squeeze in the early week abated with no more official talk of intervention yesterday, while markets are also doubting if Japan would intervene in advance of the G7 summit,” Mizuho Bank Ltd. (Singapore branch) said in a commentary.