By Kenan Machado
Global stock markets stabilized somewhat in Asia on Thursday, following broad weakness since the end of last week, with shares in Japan gaining after six straight sessions in the red.
The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -3.67% was up 0.8%, recovering from Wednesday’s 1.6% decline, though the index was still off 3.5% since closing at a 25-year high on Tuesday last week.
The Nikkei’s gains come despite a stronger yen, with the dollar /zigman2/quotes/210561418/realtime/sampled JPYUSD +1.3807% last at ¥112.95, compared with ¥113.21 at Tokyo’s stock market close on Wednesday.
The Japanese market’s early surge was accompanied by soaring corporate profits, so valuations aren’t extraordinarily high, said Marcel Thieliant, senior Japan economist at Capital Economics, giving more room for stocks there to rebound.
Shares were little changed elsewhere in the region, however, following broad overnight declines in the U.S. The S&P 500 fell 0.6%, its biggest drop since early September.
“There is probably a bit of caution in [Asian] markets” ahead of the vote on U.S. tax reform, said Paul M. Kitney, chief equity strategist for Asia Pacific at Daiwa Capital.
If the bill doesn’t come through by the end of the year, it would be negative for the U.S. dollar, he said, and could hurt the earnings of Japanese companies as well as global markets.
Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -3.30% was up 0.5%, while Singapore’s Straits Times Index /zigman2/quotes/210597985/delayed SG:STI -3.23% and Taiwan’s Taiex were weaker after opening with modest gains.
Hong Kong shares were higher, lifted by a 2.1% rise in technology heavyweight Tencent /zigman2/quotes/204605823/delayed HK:700 -3.31% , which late Wednesday reported a nearly 70% jump in third-quarter net profit, beating expectations, thanks to continued demand for its online games. The Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -2.42% was last up 0.6%.
Another Tencent-related stock, Yixin /zigman2/quotes/203271953/delayed HK:2858 -4.00% , opened 30% higher in its Hong Kong market debut, but the gains in China’s largest online car retailer quickly pared to a 10% rise. The US$867 million deal, which was priced at the higher end of an indicative range, was one of the hottest new share listings in the city, with retail investors bidding 560 times the number of shares on offer.
In mainland China, stocks continued to be weighed down by worries about deleveraging in the economy. Weakness was fueled by commodity declines, especially in copper and other industrial metals, as data earlier this week showed Chinese industrial output and fixed-asset investment growth slowing in October. The Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -3.71% was off 0.2%, though Shenzhen’s benchmark /zigman2/quotes/210598015/delayed CN:399106 -4.93% rebounded some, with a 0.3% rise.
Meanwhile, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -3.25% was on course to end the longest losing streak since May 5, when the market fell for four straight trading days. The stock index was last up 0.2%, despite softer-than-expected October job growth.
Among the outperformers, Santos /zigman2/quotes/207349564/delayed AU:STO -2.57% surged 12.7% as investors bet that rival Harbour Energy’s interest in a takeover of the Australian oil-and-gas company hasn’t cooled.
Santos said it knocked back an offer worth 4.55 Australian dollars (US$3.45) a share in August, and wasn’t currently in talks with Harbour. However, the Australian Financial Review reported that Harbour was readying a new bid of around A$5.30 a share in cash.
In Japan, shares of Nintendo rose 2% after The Wall Street Journal reported that the Japanese videogame giant was in talks with a Hollywood studio to make an animated ”Super Mario Bros.” movie based on the iconic videogame series.