Asian markets mixed as investors consider latest earnings

HONG KONG – Asian share benchmarks were mixed on Thursday as investors digested the latest quarterly corporate earnings.

KEEPING SCORE: Japan’s benchmark Nikkei 225 index climbed 0.5 per cent to 22,319.61 and South Korea’s Kospi jumped 1.1 per cent to 2,475.64 after Samsung reported better than expected earnings. Hong Kong’s Hang Seng lost 1.2 per cent to 29,989.63 and the Shanghai Composite in mainland China lost 1.4 per cent to 3,075.03. Australia’s S&P/ASX 200 dipped 0.2 per cent to 5,910.80. Markets in Southeast Asia were lower.

EARNINGS: South Korea’s Samsung Electronics reported its net income grew 52 per cent in the first quarter on robust demand for its memory chips. Earlier, U.S. companies reported strong numbers, with aerospace company Boeing and railroad operator Norfolk Southern both topping Wall Street’s estimates in the first quarter while payment processing giant Visa posted a sharp jump in profits for the period. In Europe, energy company Royal Dutch Shell’s profits rose by two-thirds for the quarter on higher crude oil prices while Germany’s Deutsche Bank eked out a profit after a big loss in the previous period.

YIELDS: Rising interest rates for U.S. Treasurys remained on investors’ minds, with the yield on the 10-year note hovering at a four-year high as it climbed to 3.03 per cent from 3 per cent. There were worries that markets would be rattled when the yield crossed the 3 per cent threshold because it might cause the Federal Reserve to alter its outlook for interest rates but they now appear to be unfounded. Higher rates, which are rising on expectations of stronger U.S. economic growth and inflation, are also helping shore up the dollar.

CHINA MEETING: Looming large next week is the visit to Beijing by U.S. Treasury Secretary Steve Mnuchin to discuss trade and economic issues. The trip, which comes amid elevated tensions, is seen as a positive sign that the two sides can avert a trade war, with both President Donald Trump and Mnuchin expressing optimism they can resolve the dispute between the world’s two biggest economies. A Chinese Commerce Ministry spokesman urged the U.S. to “discard unilateralism and protectionism, respect World Trade Organization rules and settle disputes through fair dialogue and negotiation.”

LOOK AHEAD: Investors area also hunkering down ahead of a few other events with market-moving potential, starting with a European Central Bank policiy decision later Thursday. On Friday there’s a historic meeting between the leaders of North and South Korea as well as U.S. quarterly GDP data.

QUOTEWORTHY: “The market has sort of oversold their equity hand, I think the 3 per cent got overplayed,” said Stephen Innes, head of Asian trading at OANDA. On the U.S.-China trade meeting, he added, “With the U.S. making that olive branch offering and making the step to go over there, I think it would be highly unlikely if they didn’t come back with some sort of outcome.”

WALL STREET: Major U.S. benchmarks had a mixed finish. The S&P 500 index added 0.2 per cent to 2,639.40. The Dow rose 0.2 per cent to 24,083.83. The Nasdaq composite dipped 0.1 per cent to 7,003.74.

ENERGY: Oil futures extended gains. Benchmark U.S. crude oil rose 21 cents to $68.26 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 35 cents to settle at $68.05 a barrel on Wednesday. Brent crude, used to price international oils, rose 36 cents to $74.36 a barrel in London.

CURRENCIES: The dollar slipped to 109.28 yen from 109.43 yen. The euro rose to $1.2176 from $1.2162.