Most Asia-Pacific Indexes Gain as Markets Wait for Powell

Hong Kong

Hong Kong’s Hang Seng Index recovered today after five straight losses. The index gained 0.31% today on the resumption of trade talks between the US and China. The index opened higher but gave up some of the gains throughout the trading day. 30 stocks in the index advanced, while 12 dropped. Yesterday, the iShares MSCI Hong Kong ETF (EWH) lost 1.03%. We may see some recovery in the ETF today.

Japanese equities fall

Today, the Bank of Japan published the producers price index (or PPI), a measure of inflation, for June. Compared to May, producers’ prices softened by half a percent. Compared to June 2018, prices were down 0.1%.

Amid the ongoing trade war between the US and China, the import and export prices remained under pressure in June. Export prices dropped by 0.6% while import prices softened by 0.7% over May. The drop was even higher on a yen basis as the Japanese yen became stronger in June due to flight to safety.

After opening lower and rising in early trade, Japan’s Nikkei 225 ended 0.15% lower as investors cautiously waited for the Fed chair Powell’s testimony. 79 stocks in the index advanced while 142 declined in today’s volatile trading. Toyota (TM) saw a marginal decline while Honda (HMC) gained 0.25% on the Tokyo Stock Exchange today. Both these automakers are also listed in the US.

Yesterday, the iShares MSCI Japan ETF (EWJ) lost 0.89% on the NYSE Arca even as Nikkei 225 posted marginal gains. Honda lost 0.46% while Toyota (TM) stayed steady on the NYSE.

South Korea’s KOSPI gains

South Korea’s KOSPI was back in the green territory today after two days of losses. 467 stocks in the index gained while 245 declined. Samsung and SK Hynix gained 1% and 4.4%, respectively, as reports emerged about these companies cutting chip production amid oversupply. We may see American chipmakers rising on the news today. Yesterday, the iShares MSCI South Korea Capped ETF (EWY) lost 0.37% on NYSE Arca. Korea’s unemployment rate for June remained at 4% even as the market expected it to fall to 3.9%.

Australia and New Zealand

Australia’s ASX200 gained 0.36% today. The index gained in the early trade but gave up a large part of the gains thereafter. Basic materials was the worst-performing sector today with stocks of Rio Tinto (RIO) and BHP Group (BHP) losing 0.65% and 0.17%, respectively, on the Australian Stock Exchange (or ASX). Both these miners are also listed in the US.

Yesterday, Rio Tinto (RIO) gained 0.17% on NYSE. BHP Group (BHP), which lost 0.56% on NYSE yesterday, was up 0.28% in pre-market today at 5:48 AM ET. The iShares MSCI Australia ETF (EWA), which invests in Australian equities listed on ASX including BHP and RIO, lost 0.36% yesterday on NYSE Arca.

New Zealand’s NZ50 was the best-performing key index in the Asia-Pacific region today with a 1.06% gain. So far in 2019, the index has gained 19.6%. The index is at its lifetime high.

Singapore

After losing for three straight sessions, Singapore’s Straits Times Index gained 0.33% today. 18 stocks in the index gained while eight declined. Technology, telecom, and financials were the leading sectors.

Yesterday, the iShares MSCI Singapore ETF (EWS) ended flat. We may see some gains in the ETF depending on how dovish Powell’s testimony turns out to be.