Asian markets struggle on profit-taking

HONG KONG: Asian equities were mostly lower yesterday after healthy gains in the previous session attracted profit-takers, offsetting a strong lead from Wall Street.

Shanghai tumbled 2.20%, or 73.24 points, to 3,263.05 after rallying Monday in response to the Chinese central bank’s weekend interest rate cut. Hong Kong shed 0.74%, or 184.66 points, to end at 24,702.78 Tokyo closed flat, slipping 0.06% or 11.72 points to 18,815.16. Sydney -- which ended Monday at a seven-year high -- fell 0.42%, or 25.0 points, to 5,933.90 after the Australian central bank kept interest rates on hold, confounding expectations for a cut to another record low. However, Seoul finished 0.23%, or 4.57 points, higher at 2,001.38. US shares added to their six-year bull run Monday, with the Dow and S&P 500 again ending at record highs, while the Nasdaq surged above 5,000 for the first time since 2000, when the dot-com bubble burst.

The tech-rich Nasdaq jumped 0.90%, the Dow rose 0.86% and the S&P advanced 0.61%.

The gains came on a stream of merger announcements, including the $16.7 billion acquisition of Freescale Semiconductor by NXP Semiconductor, in a deal that links two Nasdaq companies.

On currency markets the dollar fetched 119.76 yen, down from 120.17 yen in New York, while the euro rose to $1.1194 from $1.1182.

The greenback was also at 6.2748 yuan, against 6.2850 in US trade, levels not seen since October 2012 and well up from 6.2668 on Friday before the rate cut.

In Sydney investors reversed early gains after the Reserve bank of Australia held rates at record lows.

“The market was expecting another cut and because that didn’t come through, and given that the RBA didn’t deliver, you’re getting a selloff,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors, told Bloomberg News.

The Australian dollar, which has suffered heavy selling against its US counterpart in recent months, climbed to 78.28 US cents from 77.69 US cents.

Traders are watching the start Thursday of the annual meeting of China’s rubber-stamp legislature, the National People’s Congress, at which Premier Li Keqiang is expected to deliver an address on the state of the economy.

Oil prices recovered slightly after sliding in the previous session. US benchmark West Texas Intermediate rose 40 cents to $49.99 while Brent crude gained 55 cents to $60.09 in morning trade.

Gold fetched $1,207.77 against $1,216.55 late Monday.