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Asia Pacific markets trade mixed as semiconductor stocks jump

Lisa Micheal 7 Jul 24

Asia Pacific shares traded mixed on Thursday morning as semiconductor stocks in Japan and South Korea gained. 

Mainland Chinese stocks dipped in early trade: The Shanghai composite traded down 0.12% and the Shenzhen component slipped 0.2%. The Shenzhen composite shed 0.159%.

Over in Hong Kong, the Hang Seng index gained 0.16%.

The Nikkei 225 in Japan rose 0.37%, with shares of index heavyweight Softbank Group advancing more than 2%. The Topix index gained 0.22%.

Australia's S&P/ASX 200 traded 0.39% higher as the sectors mostly advanced. Investors will be watching out for Reserve Bank of Australia Governor Philip Lowe's speech at 11:05 a.m. HK/SIN on Thursday for clues about the central bank's future policy moves.

In South Korea, the Kospi slipped 0.65% as shares of LG Chem plunged more than 4.5%. But shares of chipmaker SK Hynix jumped 1.8% after the company announced a reduction in chip output.

Before market open, SK Hynix reported second-quarter earnings.

Tumbling memory chip prices led to a 89% year-on-year plunge in SK Hynix's operating profit for the reporting period, which came in at approximately 638 billion Korean won ($541.9 million), missing expectations from Refinitiv SmartEstimate.

SmartEstimates give more weight to recent estimates by analysts who are more consistently accurate, according to Reuters.

Shares of rival Samsung Electronics, an industry heavyweight, gained 1.19% in morning trade. Earlier this month, Samsung had said its second-quarter profit likely fell 56% year-on-year, citing sustained weakness in price and demand for memory chips.

Samsung is set to formally announce earnings on July 31. The company also said Thursday its Galaxy Fold phone is set to launch in September, following an earlier delay after multiple tech reviewers reported that the device broke easily.

Over in Japan, shares of semiconductor test equipment manufacturer Advantest skyrocketed about 17%.

That comes amid ongoing trade tensions between Seoul and Tokyo after Japan introduced export restrictions on critical high-tech materials to South Korea that are important in the production of semiconductors.

Analysts have said that if the situation between the two countries is not resolved, there could be serious consequences to the global semiconductor industry.

Meanwhile, the VanEck Vectors Semiconductor ETF (SMH) jumped 2.7% to hit a record overnight stateside, led by a 7.4% rally in Texas Instruments sparked by better-than-expected quarterly results.

Overnight on Wall Street, the S&P 500 advanced 0.5% to close at a record of 3,019.56, while the Nasdaq Composite rose nearly 0.9% to end the day at 8,321.50. The Dow Jones Industrial Average, however, closed 79.22 points lower at 27,269.97.

Elsewhere, the European Central Bank is also set to meet on Thursday. Analysts expect that it would keep interest rates unchanged.

"The risk is the ECB loosens monetary policy tonight which can further undermine (the euro), " Joseph Capurso, senior currency strategist at Commonwealth Bank of Australia, wrote in a note.

"Our base case is for the ECB to remove its forward guidance tonight that interest rates will remain 'at their present level through the first half of 2020, and in any case for as long as necessary'," Capurso said.

Ahead of that meeting, the euro traded at $1.1137 after slipping from levels above $1.12 seen earlier in the trading week.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.711 after touching lows around 97.6 yesterday.

The Japanese yen traded at 108.16 against the dollar after seeing highs around 108.0 in the previous session, while the Australian dollar changed hands at $0.6982, slipping from levels above $0.699 yesterday.

Oil prices were higher Thursday morning during Asian trading hours, with the international benchmark Brent crude futures contract rising 0.17% to $63.29 per barrel. U.S. crude futures advanced 0.32% to $56.06 per barrel.

Here is a look at some of the data set to be released in the day ahead:

  • Hong Kong: Trade data for June
  • Japan: Nissan earnings
  • South Korea: Hyundai Heavy Holdings
  • European Union: European Central Bank meeting and news conference
  • Turkey: Central bank meeting, its first since President Recep Tayyip Erdogan fired Murat Cetinkaya, Turkey's former central bank governor)

— Reuters and CNBC's Fred Imbert contributed to this report.