Morning BriefAsian Markets Trade Mixed as Australia and Japan Struggle for Gains

Oil prices rose during Asia trading hours on Friday: U.S. crude futures were up 0.73% at $47.12 a barrel. Global benchmark Brent rose 0.72% to $50.61.
A trader sits and watches the screen at the Shanghai Stock Exchange [Image: Bloomberg]

Asia-Pacific markets traded mixed on Friday as investors kept an eye on negotiations over additional fiscal stimulus in the U.S.

South Korea’s Kospi index rose 0.86% to 2,770.06 while the Kosdaq was up 0.73% to 928.44. Government data released Friday showed the country’s exports in the first 10 days of December jumped 26.9% from a year ago thanks to a sales boost in major products such as semiconductors, Reuters reported.

In Japan, the Nikkei 225 declined 0.39% to 26,652.52 while the Topix index rose 0.33% to 1,782.01.

Australia’s benchmark ASX 200 fell 0.61% to 6,642.60, with most sectors finishing in the red. The heavily-weighted financials subindex declined 0.86% as the country’s so-called Big Four banks struggled for gains.

Hong Kong’s Hang Seng index advanced 0.44% in afternoon trade. Chinese mainland shares declined: The Shanghai composite was down 0.77% at 3,347.19, the Shenzhen composite lost 1.31% to 2,223.94 and the Shenzhen component fell 1.28% to 13,555.14.

Major indexes in India and Singapore traded up in the afternoon.

Friday’s session followed a mixed end on Wall Street where the S&P 500 registered back-to-back losses — U.S. futures traded mixed.

Markets are “having to balance a weak short-term picture against a much rosier medium-term as vaccines start to be rolled out,” said Tapas Strickland, director of economics and markets at the National Australia Bank, in a morning note. “In this environment equities have largely held onto recent gains.”

In the U.S., few signs of progress towards a coronavirus relief package emerged as negotiations dragged on. While lawmakers seek to pass a bill before lifelines expire at the end of 2020 — when millions of Americans risk falling deeper into financial peril — disagreement over state and local stimulus, unemployment assistance and stimulus checks still exist.

Meanwhile, an important U.S. Food and Drug Administration advisory panel recommended approval of Pfizer’s Covid vaccine for emergency use.

Across the pond, post-Brexit trade talks between the U.K. and European Union remain at an impasse over several notable issues including fishing rights and competition rules. Downing Street said “very large gaps” remain, while European Commission President Ursula Von der Leyen described the two sides as “far apart.”

The U.S. dollar index, which measures the greenback against a basket of its peers, fell 0.17% to 90.670, down from levels above 90.800 in the previous session.

The safe-haven currency weakened across the board during Asia trading hours, Carol Kong from the Commonwealth Bank of Australia, wrote in an afternoon note.

The Japanese yen changed hands at 104.07 per dollar, strengthening from an earlier level around 104.27.

Elsewhere, the Australian dollar advanced 0.41% to $0.7564.

Iron ore prices advanced Friday. Benchmark iron ore futures on China’s Dalian Commodity Exchange jumped nearly 10% to break above 1,000 yuan ($152.95) per tonne for the first time likely due to supply concerns and growing steel demand in the Asian country, Reuters reported.

Analysts expect strong Chinese demand will keep iron ore prices elevated in the coming months. Commonwealth Bank’s Kong noted that strong iron ore prices are “very supportive” of the Australian dollar. Iron ore is one of Australia’s major exports.

“Australian products that are restricted by the Chinese government so far remain relatively small as a share of total Australian exports to China,” Kong wrote.

Oil prices rose during Asia trading hours on Friday: U.S. crude futures were up 0.73% at $47.12 a barrel. Global benchmark Brent rose 0.72% to $50.61.

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