Aussie Rally Lone Bright Spot in Weak Asia Session

(Bloomberg) -- Thank goodness for Australia.

Stocks Down Under are up almost 1 percent Wednesday, the only major market in the Asian region climbing after U.S. stocks hit a fresh record high overnight. The broader MSCI Asia Pacific Index is down, off about 0.5 percent with South Korea leading declines on renewed weakness in Samsung Electronics Co. amid a furor over its malfunctioning folding smartphone.

Australia takes the spotlight thanks to deepening speculation of an interest rate cut after inflation slowed sharply in the first three months of the year to send the currency down over half a U.S. cent. Consumer price growth of 1.3 percent came in below estimates, according to a statistics bureau report Wednesday.

Traders are pricing in a rate cut over the next six months as a done deal, with a strong chance of two reductions. The Reserve Bank of Australia next meets in May, after leaving its key cash rate target unchanged at 1.5 percent for a 29th straight meeting earlier this month.

While Australia’s economy has struggled with a persistent housing slump and low inflation, its stock market has fared surprisingly well thus far this year with the S&P/ASX 200 up 13 percent, outpacing gains in the wider Asia Pacific benchmark. The Australian index has continued to climb after its best-ever three-month start to a year according to data going back to 1992.

Australia’s emerging technology industry is the best performing sector this year with a 28 percent advance, led by artificial intelligence firm Appen Ltd. and payment services provider Afterpay Touch Group Ltd. -- prominent members of the nation’s WAAAX tech cohort.

Aussie Rally Lone Bright Spot in Weak Asia Session

The more traditional commodities space has also been a bright spot, with the energy industry rallying almost 19 percent this year thanks in part to a gain in oil prices.

While there’s plenty of action in Australia, the same largely can’t be said elsewhere in the region.

The Asia Pacific benchmark is currently mired in a 17th straight trading day of price moves below 1 percentage point. It’s the longest such period of inactivity since a 33-day stretch from the end of March through to mid-May 2018, according to data compiled by Bloomberg.

Back then, Asian markets snapped out of those particular doldrums thanks in part due to an escalating U.S.-China trade war. With the two sides set to resume trade talks next week in Beijing, perhaps we’ll see history repeating -- or at least rhyming.

Stock Market Summary

  • MSCI Asia Pacific Index ex-Japan down 0.5%
  • MSCI Asia Pacific Index down 0.6%
  • Japan’s Topix index down 0.9%; Nikkei 225 down 0.6%
  • Hong Kong’s Hang Seng Index down 0.8%; Hang Seng China Enterprises down 1%; Shanghai Composite down 0.9%; CSI 300 down 0.9%
  • Taiwan’s Taiex index little changed
  • South Korea’s Kospi index down 1.3%; Kospi 200 down 1.5%
  • Australia’s S&P/ASX 200 up 0.9%; New Zealand’s S&P/NZX 50 up 0.6%
  • India’s S&P BSE Sensex Index up 0.1%; NSE Nifty 50 up 0.2%
  • Singapore’s Straits Times Index up 0.2%; Malaysia’s KLCI up 0.5%; Philippine Stock Exchange Index little changed; Jakarta Composite down 0.3%; Thailand’s SET little changed; Vietnam’s VN Index up 0.8%
  • S&P 500 e-mini futures down 0.2% after index closed up 0.9% in last session

©2019 Bloomberg L.P.