Markets in Asia closed mixed on Tuesday as investors in the region digested the release of China’s official Purchasing Managers’ Index and the Bank of Japan’s rates decision. Wall Street had closed lower Monday on news that planned stateside tax cuts could be gradually implemented. Investors
Markets on the move
Japan’s Nikkei 225 pared losses to close flat at 22,011.61. Financial stocks recorded losses of more than 1 percent while tech shares were mixed: Mitsubishi UFJ closed down 2.57 percent, Nomura Holdings tumbled 2.71 percent and Sony rose 2.39 percent.
The Bank of Japan on Tuesday kept its monetary policy steady after a two-day meeting. The central bank said it would maintain the short term interest rate at minus 0.1 percent.
Meanwhile, industrial production in September declined 1.1 percent from a month ago, government data showed. That compared to a median 1.5 percent fall estimated by markets, Reuters said.
Across the Korean Strait, the Kospi rose 0.86 percent to close at 2,523.43. Automakers rallied, but several blue-chip tech names declined: Hyundai Motor closed up 3.21 percent and LG Electronics declined 4.01 percent. Shares of Lotte Shopping surged 7.14 percent on news that South Korea and China would work on thawing relations that grew icy as a result of Seoul’s deployment of an anti-missile system.
Of note, Samsung reported its third-quarter profit almost tripled from a year ago to 14.5 trillion won ($12.91 billion), boosted by memory chip income, according to Reuters. Samsung shares reversed early losses to close up 1.92 percent.
The S&P/ASX 200 lost 0.17 percent to end at 5,909.017, with gains in the consumer staples sub-indexes offset by losses in the heavily-weighted financials sub-index.
Hong Kong’s Hang Seng Index was flat at 3:13 p.m. HK/SIN as casino stocks erased early losses to climb higher.
On the mainland, the Shanghai Composite pared some losses made in the last session to finish the session 0.12 percent higher at 3,394.5033. The Shenzhen Composite rose 0.694 percent to close at 2,002.2838.
China’s official manufacturing Purchasing Managers’ Index for October came in at 51.6 — missing the 52.0 figure forecast by analysts in a Reuters poll. The official services PMI, meanwhile, came in at 54.3, below the 55.4 seen last month.
While the dips in PMIs could indicate “a moderation” in the fourth-quarter from previous periods, they were “unlikely to change the broad picture of steady growth in 2017,” ANZ Senior China Economist Betty Rui Wang said in a note.
U.S. stocks closed lower on Monday following the tax cut reports, with the Dow Jones industrial average fell 85.45 points to end at 23,348.74.
The lead up
Tax cuts were in the spotlight overnight following a Bloomberg report that planned reductions in the corporate tax rate would be gradually implemented. That plan would lower the corporate tax rate by three percentage points each year from the existing 35 percent beginning in 2018.
In response to the latest reports, Press Secretary Sarah Sanders said President Donald Trump’s position on corporate taxes had not changed.
Other central banks were also in focus, with the Federal Open Market Committee beginning its own two-day meeting on Tuesday. It is due to make its interest rates decision on Wednesday U.S. time.
Ahead, Trump is expected to announce his choice for the next chair of the Federal Reserve on Thursday. Most in the markets expect Trump to choose Fed Governor Jerome “Jay” Powell for the role. Other candidates that are in the running include Stanford economist John Taylor, current Fed Chair Janet Yellen and former Fed Governor Kevin Warsh.
Also of note was the indictment of former Trump campaign chairman Paul Manafort as part of the ongoing Russian interference probe.
“This story which has popped up again … could unsettle markets in the run-up to Trump’s big [Fed] announcement, tax policy progress and Asia tour,” Rob Carnell, Asia head of research at ING, cautioned in a note.
The commodities trade
Oil prices pared some gains, but Brent oil continued to hold above the $60 mark. Brent crude lost 0.15 percent to traded at $60.81 a barrel. U.S. West Texas Intermediate crude, meanwhile, slid 0.24 percent to $54.02 a barrel — near its highest close since February.
— CNBC’s Yen Nee Lee contributed to this report.
Asia markets: Focus on China PMI, BOJ decision, Samsung earnings – CNBC}