Financial stocks gain in Asia trading as yen softens

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Financial stocks throughout the Asia Pacific region climbed on Wednesday as shares in Toshiba tumbled further in response to the late reveal of a massive writedown on its nuclear business and US Treasuries’ deterioration slowed following a more substantial drop on Tuesday in the wake of comments from Federal Reserve chair Janet Yellen.

Tokyo’s Topix index was up 1.1 per cent, led by a 2.5 per cent gain in financials as well as a 1.5 per cent rise in the materials segment. Shares in Toshiba fell as much as 13.3 per cent, however, as investors reacted to Tuesday’s delayed after-market earnings announcement in which the company revealed a $6.3bn writedown at its nuclear business and the company’s chair said he would step down. The Nikkei 225 index was also up 1.1. per cent.

In Australia the S&P/ASX 200 was up 1 per cent, with a 1.9 per cent gain by information technology stocks and financial stocks up 1.6 per cent. Shares in Computershare jumped as much as 6.6 per cent after the company reported a 12 per cent rise in profit for the first half of its financial year and forecast earnings growth of up to 5 per cent for the full year.

Hong Kong’s Hang Seng index was up 0.5 per cent, pushed up by a 0.8 per cent rise in financial stocks. Shares in HSBC Holdings were up as much as 1 per cent following Tuesday’s announcement that Ian Stuart would be the company’s first UK chief executive officer as the company establishes a British business to comply with ringfencing regulations.

In South Korea, Samsung shares dropped as much as 1.3 per cent after closing 0.8 per cent lower on news that the country’s prosecutor said it would make another warrant request for the conglomerate’s heir apparent, Lee Jae-yong. South Korea’s Kospi index was up 0.4 per cent.

The dollar index measuring the greenback against a basket of peers was flat after gaining 0.3 per cent on Tuesday following hawkish comments from Fed chair Janet Yellen.

Japan’s yen was 0.1 per cent weaker at ¥114.3 per dollar, hovering around its weakest level since January 30 during morning trading in the wake of the dollar’s Tuesday rally. The Australian dollar was 0.1 per cent stronger against its US counterpart at $0.7667.

The biggest loser in the region was South Korea’s won, dropping 0.5 per cent to Won1,142.95 per dollar.

Bond markets were still digesting Ms Yellen’s Tuesday comments during the morning session. The yield, which moves inversely to price, on 10-year US Treasuries was up 1 basis point at 2.477 per cent after rising 3bp on Tuesday.

Australian 10-year government bonds saw yield rise 5bp to 2.778 per cent, continuing a deterioration that has brought yield 9bp higher in the week so far. Yield on 10-year New Zealand sovereign notes was up 5bp on Wednesday for a rise of 10bp in the week so far to 3.273 per cent.

Markets will be looking ahead to a second round of comments from Ms Yellen on Wednesday during testimony to the House Financial Services Committee.

Brent crude, the international benchmark, was down 0.4 per cent at $55.77 a barrel. The US marker, West Texas Intermediate, was off by 0.5 per cent at $52.97.

Gold was down 0.2 per cent at $1,226.31 per ounce.

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