By Daniel Inman
Hong Kong was dragged down by a sharp fall in HSBC Holdings on
Tuesday, after the bank's earnings report disappointed the market,
while the Australian dollar rose after the Reserve Bank of
Australia cut interest rates to an all time low.
HSBC (HBC), which announced its interim earnings after the
market closed on Monday, slumped 5% -- its largest daily decline
since July 2012. Although the bank reported a 23% increase in net
profit for the first half of the year, its stock was hit by fears
that its revenues were being affected by slowing growth in emerging
markets.
As the single largest constituent in Hong Kong's Hang Seng Index
, accounting for around 15% of the benchmark, the bank's decline
weighed on the entire market. The Hang Seng fell 1.3% to
21,923.70.
The Australian dollar (AUDUSD), which hit a three-year low
against its U.S. counterpart on Monday, picked up after RBA decided
to cut rates to a record low of 2.5%. Expectations for lower
interest rates were high, with all 15 economists surveyed by The
Wall Street Journal forecasting a rate cut.
The currency was at $0.8991 late in Asia, compared to $0.8913
late Monday, and was lifted after the central bank omitted to say
that there remains space for further cuts.
The central bank has now cut interest rates eight times since
late 2011, as a weakening mining sector prompted policy makers to
use monetary policy to support growth in other parts of the
economy.
The S&P/ASX 200 fell 0.1% to 5,105.60.
The U.S. dollar (USDJPY) weakened against the yen early Tuesday,
though it recovered as the day progressed. The greenback was at
Yen98.37 late in Asia, compared with Yen98.30 late Monday in New
York. The Nikkei closed 1% higher at 14,401.06.
"In thinly traded markets typical of mid-summer like now, index
movements can be more vulnerable than usual to single-factor
trading patterns, such as reflexive weak-yen based-stock buying,"
said Yoshihiro Okumura, general manager at Chibagin Asset
Management.
Shares in Sony Corp. (SNE) ended 4.6% lower after the company
rejected the proposal made by hedge fund investor Daniel Loeb to
sell part of its entertainment business through a public
offering.
Mitsubishi Materials Corp. (MIMTF) rose 3.1% in Tokyo after the
Nikkei reported that its group operating profit for the first
quarter is believed to have risen more than 30% on year to about
Yen15 billion, driven by an improvement in its copper segment and a
weaker yen.
Also in Tokyo, Toshiba Corp. (TOSYY) outperformed the broader
market, up 1.4% after a Nikkei report said that the company plans
to build a NAND flash memory factory in a joint venture with
SanDisk, with the total investment estimated to be Yen400
billion.
In Taiwan, where the Taiex fell 1.2% to 8,038.91, phone maker
HTC Corp. (HTCXF) dropped 2.9% after it posted a 37% on-year drop
in revenue in July. The technology firm's stock has been under
pressure in recent months and has lost 50% of its value so far this
year.
South Korea's Kospi Composite fell 0.5% to 1,906.62, the
Shanghai Composite Index rose 0.5% to 2060.50, and Singapore's
Strait Times index was last down 0.7%.
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