By Ese Erheriene
Asian shares were broadly lower Thursday, with Thailand’s equities weighed down by persistent concerns about the health of the country’s king.
Thailand’s SET index /zigman2/quotes/210598047/delayed TH:SET +0.65% was last down 3.3%, after declining more than 6% in the previous session. The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.23% reversed early gains to close down 0.4%, hitting a six-day low as the yen changed direction and strengthened against the U.S. dollar after disappointing Chinese trade data helped dampen an uptick in the greenback.
Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.74% ended down 0.7%, Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.57% shed 0.9% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.47% closed down 1.6%.
“Thailand has been a very big factor [for investors] because of the concern on the king,” said Alex Wong, director of asset management at Ample Capital in Hong Kong. “That is impacting Southeast Asian markets.”
On Wednesday, Thailand’s Royal Household Bureau issued a statement saying that King Bhumibol Adulyadej’s “overall sickness and symptoms are still not stable” following a procedure to purify his blood. This followed reports over the weekend that the 88-year-old king’s health wasn’t stable. The Thai market is down more than 9% so far this week.
Elsewhere, data released Thursday showed that China’s September exports were down sharply from a year earlier, as global demand for goods remained sluggish.
Exports tumbled 10.0% from a year earlier in dollar terms, accelerating from a decline of 2.8% in August. Imports in September declined 1.9% from a year earlier, reversing a 1.05% increase in August. The Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -0.04% shrugged off the data and closed up 0.1%.
Meanwhile, exporters in Japan shed some of their gains but broadly remained in positive territory, even as the yen strengthened, making their goods more expensive to ship overseas. The currency /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0231% was last up 0.4% against the greenback. Among key auto makers, Nissan Motor /zigman2/quotes/208298710/delayed JP:7201 +2.35% closed up 0.6%, Honda Motor /zigman2/quotes/200490352/delayed JP:7267 +1.61% ended 0.3% higher while Mazda Motor /zigman2/quotes/204777714/delayed JP:7261 +3.97% was finished down 0.6%.
Investors swung back to the perceived safety of the Japanese currency after the larger-than-expected fall in Chinese exports poured cold water on fragile market optimism about global growth.
The minutes from the recent U.S. Federal Reserve meeting did not induce heavy dollar /zigman2/quotes/210598269/delayed DXY +0.39% buying, said Hideo Watanabe, manager of forex products group at Aozora Bank.
Overnight, the minutes of the Federal Open Market Committee’s September meeting revealed that most voting members felt “the case for an increase in the Federal-Funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”
The minutes offered little in the way of surprises and the market continued to believe that the Fed was on track to act in December. According to CME Group’s FedWatch tool , the probability of a rate rise at the central bank’s last meeting of the year was steady at 69.5% from a day earlier.
In Australia, producers were hit by falling commodity prices, which chipped away at their bottom line and dragged down the wider benchmark. Shares of Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO -3.28% /zigman2/quotes/202627887/composite RIO +2.12% /zigman2/quotes/208934945/delayed UK:RIO -0.41% and BHP Billiton /zigman2/quotes/201448516/delayed AU:BHP -2.17% /zigman2/quotes/208108397/composite BHP +0.49% /zigman2/quotes/208108397/composite BHP +0.49% , two of the world’s biggest copper producers, were off 2.7% and 2.9%, respectively. The London Metal Exchange’s three-month copper contract was recently down 0.8% at $4,776.50 a metric ton. Brent, the global crude oil benchmark, was last down 0.5% at $51.55 a barrel in Asian trade.
In Hong Kong, shares of Cathay Pacific Airways /zigman2/quotes/203532437/delayed HK:293 -0.67% tumbled 5.0% after the premium carrier said it was seeing difficult operating conditions in the second half. HSBC downgraded its rating on the blue-chip stock to reduce from hold, telling clients that Cathay Pacific should expect an unprofitable 2017.
“Yield erosion [at the airline] continued as expected but the decline is worse than we anticipated,” HSBC said in a note.
Signs of stress were also re-emerging in Hong Kong’s currency markets Thursday as the cost for banks to borrow Chinese yuan from each other overnight in Hong Kong rose to 3.84%, up from 2.83% Wednesday. Analysts usually deem a rate of 1% to 2% normal. Moves in this key interbank rate are closely watched because they sometimes reflect actions taken by China’s central bank.
Elsewhere, the Bank of Korea on Thursday kept its base rate unchanged for a fourth straight month. The decision to hold the rate steady at a record-low 1.25% comes as the central bank faces renewed pressure from parliament to refrain from easing policy further.
Looking ahead, the market will be watching for initial jobless claims data from the U.S., due later in the global trading day.
—Hiroyuki Kachi, Liyan Qi, Kosaku Narioka and Saumya Vaishampayan contributed to this article.
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