ASIA MARKETS: Asian Markets Largely Quiet Following Monday's Rally
Bank stocks slump in Australia, but gain in Singapore
Asian stock indexes were mixed Tuesday after strong gains a day earlier, with Australian bank shares among the laggards.
Earnings season for that sector came to an end with Commonwealth Bank of Australia reporting underwhelming results. The bank also flagged margin concerns, as some smaller peers have.
Reports that the Australian government would introduce a bank tax when it releases its budget proposal later Tuesday also hurt the sector.
"This comes as a bit of surprise," said Ric Spooner, chief market analyst at CMC Markets.
CBA (CBA.AU) and Westpac (WBK) dropped about 3%, while Australia and New Zealand Banking (ANZ.AU) shed more than 2% and National Australia (NABZY) declined 1.2%. UBS also dropped Westpac from buy Tuesday amid anticipation of a sharp slowdown in Australia's housing market because of steps to cool real-estate prices.
Singapore banks, though, continued their earnings-season gains. OCBC (O39.SG), the city-state's No. 2 lender by assets, topped estimates and rose 1%, helping push up DBS by 1.3%. Investors have been relieved about the locals lenders' first-quarter loan quality.
Singapore's Straits Times Index rose 0.3%, while Australia's S&P/ASX 200 declined 0.3%.
Meanwhile, Taiwan's Taiex briefly broke through 10,000 for the first time in two years. The index, however, pulled back and was down 0.2%.
Hong Kong's Hang Seng index rose 1.3%, bolstered by Chinese markets paring losses that had been stoked by concerns about a clampdown in speculative trading. The startup-heavy ChiNext , which earlier hit 20-month lows, was up 0.8%.
"We are approaching the end of the tightening cycle," said Caroline Yu Maurer, head of Greater China Equities at BNP Paribas Investment Partners in Hong Kong. "What [Chinese authorities] are trying to do is squeeze out some of the irregularities without hitting liquidity." She thinks large Chinese insurance and banking stocks listed in Hong Kong will benefit from lower competition and better liquidity owing to their size and ability to source funds.
Gambling companies listed in Hong Kong were higher Tuesday, after their shares and those of their parent companies fell in the U.S. on Monday following Macau's announcement that it would introduce further restrictions to curb money laundering in the gambling hub. The measures are expected to hurt cash availability for some gamblers.
Japanese stocks were down modestly after Monday's 2.3% jump to 17-month highs. If signs of a June interest-rate increase from the U.S. Federal Reserve strengthen and enable the dollar to get back to Yen115, the Nikkei could get to 20,500, said Hisao Matsuura, chief strategist at Nomura in Tokyo. The Nikkei fell 0.3%.
Markets in Korea are closed as voters there elect a new president after former President Park Geun-hye was removed from office over a corruption scandal. The Kospi hit a record high Monday while jumping 2.3%, the biggest daily gain in 20 months.
(END) Dow Jones Newswires
May 09, 2017 07:04 ET (11:04 GMT)