Asian Markets Mixed as Oil Drops a further 1% to $42.72
Stocks in Asia-Pacific were mixed in Wednesday trade as investors continue to watch for developments on U.S. coronavirus stimulus talks.
Mainland Chinese stocks were lower on the day, with the Shanghai composite down fractionally to about 3,325.02 while the Shenzhen component slipped 0.999% to around 13,467.91. Hong Kong’s Hang Seng index, on the other hand, advanced about 0.9% as of its final hour of trading.
In Japan, the Nikkei 225 added 0.31% to close at 23,639.46 while the Topix index gained 0.73% to finish its trading day at 1,637.60. South Korea’s Kospi rose 0.53% to close at 2,370.86.
Meanwhile, shares in Australia edged higher on the day, with the S&P/ASX 200 up 0.12% to 6,191.80 as the MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.49%.
Shares of Cathay Pacific in Hong Kong jumped more than 3% in afternoon trade after the company on Wednesday announced that about 5,900 employees will be laid off as part of a restructuring plan. The airline’s subsidiary Cathay Dragon will also cease to operate with effect from today.
“I think the cost cutting is massive,” Kelvin Lau, head of auto, transportation and industrial at Daiwa Capital Markets, told CNBC’s “Street Signs Asia” on Wednesday.
Lau said the airline is set to have a “leaner cost structure going forward,” though he acknowledged the restructuring costs and other impairments faced by Cathay Pacific in the short-term.
Shares of other airlines in the region also saw gains on Wednesday: Australia’s Qantas Airways rose 0.23%, Japan Airlines surged 2.93% while ANA Holdings added 1.83% and Korean Air Lines gained 2.69%. Over in Singapore, shares of Singapore Airlines jumped 1.14% in afternoon trade.
Investor focus on Wednesday will likely be on stimulus negotiations stateside. The Trump administration and Democrats made progress in negotiations on Tuesday but major differences remain, according to White House chief of staff Mark Meadows.
“Even if a deal is not agreed to before November, there are high hopes there will be a package after the election,” Tapas Strickland, director of economics at National Australia Bank, wrote in a note.
On the coronavirus vaccine front, Moderna’s CEO Stephane Bancel expects interim results from the firm’s Covid-19 vaccine trial in November, according to The Wall Street Journal. Bancel also told the Journal that the U.S. Food and Drug Administration could issue an emergency use authorization before the end of the year.
Oil prices were lower in the afternoon of Asia trading hours, with international benchmark Brent crude futures down about 1% to $42.72 per barrel. U.S. crude futures shed 0.91% to $41.32 per barrel.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 92.793 following its decline earlier this week from levels above 93.6.
The Japanese yen traded at 105.13 per dollar after spiking to levels above 105.6 against the greenback yesterday. The Australian dollar was at $0.7069, having declined from levels above $0.707 earlier this week.