Asia-Pacific stocks ended little changed Wednesday, mirroring U.S. benchmarks overnight, as investors assess the implications of President Donald Trump walked away from the Iran nuclear deal.
But oil prices CLM8, +2.65% powered higher, completely reversing what was as much as a 4% drop ahead of Trump’s announcement.
Oil futures rose more than 2% by midday Wednesday in Asia, helped by a U.S. industry group disclosing larger than expected inventory declines last week for oil and petroleum products.
Havens saw some weakness, as the yen, gold and Treasury prices posted modest declines. The 10-year Treasury yield TMUBMUSD10Y, +0.66% was recently at 2.99%, versus 2.968% late Tuesday in New York.
Many stock investors remain on the sidelines as uncertainties surround U.S. trade talks and other geopolitical risks. “Trading sentiment is muted as major indexes move within a tight trading range with shrinking volume,” noted Linus Yip, a strategist at First Shanghai Securities.
Yip said another reason, apart from the Iran decision, for subdued stock investing was Chinese Vice Premier Liu He’s trip to the U.S. next week to talk trade. He also said index provider MSCI would reveal on Monday its stock-index adjustments, unveiling the initial list of mainland China stocks to be added to its benchmark Emerging Markets Index.
Most Asia-Pacific stock indexes closed within 0.25% of Tuesday’s closing levels. Japan’s Nikkei NIK, -0.44% fell 0.4%, as the yen USDJPY, +0.57% declined against the buck.
Drug stocks lagged behind in Japan, led by Takeda Pharmaceutical ’s 4502, -2.35% 2.4% drop after it clinched a $62 billion deal to buy European peer Shire SHP, -1.26%
In what is good news for the Bank of Japan’s yearslong efforts to stoke inflation, base pay for Japanese workers rose in March at the fastest year-over-year pace since 1997; and, overall cash wages climbed 2.1%, the most since June 2003.
Oil’s bounce gave a boost to shares of petroleum companies across the region. Chinese major oil companies gained at least 2% in Hong Kong. In Australia, the energy sector rose 1%.
But offsetting that gain in Australia was a 2.8% slide for the Commonwealth Bank CBA, -2.84% the country’s biggest company by local-stock value. As part of an in-principle agreement with the country’s securities regulator, the bank has agreed to admit it attempted to engage in unconscionable conduct in the setting of a benchmark interest rate on a handful of occasions. Meanwhile, the sector faces a wide-ranging probe in Australia.
In other exchanges, Hong Kong’s Hang Seng HSI, +0.44% closed up 0.4%, while the Shanghai Composite Index SHCOMP, -0.07% fell less than 0.1%, South Korea’s Kospi Composite Index SEU, -0.24% fell 0.2%, while Australia’s S&P/ASX 200 XJO, +0.26% gained 0.3%. New Zealand’s NZX 50 NZ50GR, +0.29% finished 0.3% higher.