Asian stocks put up a mixed performance on Thursday, after Federal Reserve chair Janet Yellen said that December's monetary policy meeting would be a " live possibility " for a rate hike if upcoming economic data were supportive.
Yellen was testifying before the House Financial Services Committee in Washington on Wednesday.
"The likelihood of a rate hike in December was given further credence with Janet Yellen's remarks overnight. Yellen was keen to emphasize that if the economy continues at the current rate as the Fed expects then "December would be a live possibility". Her comments led to a strong move in the front-end of the yield curve as the two-year yield jumped five basis points to its highest level this year at 0.816 percent," IG's market analyst Angus Nicholson wrote in a note.
As a result, major U.S. averages declined overnight. The blue-chip Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) and S&P 500 (CME:Index and Options Market: .INX) closed down 0.3 and 0.4 percent respectively, while the Nasdaq Composite (^IXIC) finished flat. A pullback in energy shares, alongside a 3.3 percent slump in crude oil prices overnight, also weighed on the bourses.
Nikkei gains 1%
Japan's Nikkei 225 (Nihon Kenzai Shinbun: .N225) index extended gains, thanks to a jump indollar-yen (Exchange:JPY=) on the back of growing expectations of a December rate hike, and as heavyweight component Japan Tobacco (Tokyo Stock Exchange: 2914.T-JP) rallied 7.1 percent.
Shares of the tobacco product manufacturer leaped in Tokyo trading after raising its year-end dividend and net income forecast.
Extending their winning streak into a second day, Japan Post Insurance outpaced its peers with a 13.4 percent surge, while Japan Post Holdings (Tokyo Stock Exchange: 6178.T-JP) and Japan Post Bank climbed 3.4 and 6.2 percent respectively, following an impressive market debut in the previous trading session.
Among laggards, Takata (Tokyo Stock Exchange: 7312.T-JP) skidded 25.2 percent to its lowest levels since April 2009, after Honda Motor (Tokyo Stock Exchange: 7267.T-JP) said Wednesday it will no longer use air bag inflators made by the troubled parts supplier. Honda, which on Wednesday reported a 14 percent jump in net profit for the six months to September, closed down nearly 2 percent.
Toyota Motor (Tokyo Stock Exchange: 7203.T-JP) edged up 0.5 percent amid choppy trade as investors await the carmaker's earnings.
Toshiba (Tokyo Stock Exchange: 6502.T-JP) tanked 3.4 percent after the Nikkei business daily said the company may report its first operating loss in 6 years for the April-September quarter.
Meanwhile, board members of the Bank of Japan (BOJ) maintained their upbeat view on the country's economy but many of them warned that slowing growth in emerging markets, if prolonged, could weigh on exports, minutes of the central bank's recent rate meeting showed on Thursday.
China markets up
China's key Shanghai Composite (Shanghai Stock Exchange: .SSEC) trimmed gains to close up 1.9 percent. The climb saw the index take its rally from its August 26 low to more than 20 percent, meaning it is now in a technical bull market. Earlier in the session, the Shanghai bourse hit intra-day highs of 3,585 points, which was the index's highest level since August 21.
Securities firms were the clear winners on Thursday; Industrial Securities, Huatai Securities, Founder Securities (Shanghai Stock Exchange: 1901-SZ) and Everbright Securities (Shanghai Stock Exchange: 1788-SZ) hit the daily upward limit of 10 percent, while China Merchants Securities, Citic Securities (Shanghai Stock Exchange: 30-SZ) and Haitong Securities (Shanghai Stock Exchange: 837-SZ) tacked on between 5.9 and 7.5 percent.
Banks got a lift from the positive sentiment surrounding the securities firms, with Industrial and Commercial Bank of China (Shanghai Stock Exchange: 1398-SZ) (ICBC) and Bank of China (Shanghai Stock Exchange: 1988-SZ) rallying about 2 percent each.
Among other indexes, the blue-chip CSI300 Index surged 2.1 percent, but small-caps in the mainland lagged. The Nasdaq-style ChiNext board eased 0.7 percent.
Hong Kong's Hang Seng (Hong Kong Stock Exchange: .HSI) index also fell short of the advances, inching down marginally amid choppy trade.
China Southern Airlines (Shanghai Stock Exchange: 29-SZ) clawed back early losses to bounce up 4.7 percent in Shanghai, unaffected by news that its chairman Si Xianmin was being investigated by China's anti-graft officials for 'severe disciplinary violations." The airline's Hong Kong-listed stock also rebounded 1 percent.
Glencore (London Stock Exchange: GLEN-GB) shares surged 6 percent in Hong Kong after the commodity trader announced Wednesday plans to cut debt by selling assets.
ASX loses 0.9%
Weakness in the banking sector led Australia's S&P ASX 200 (^AXJO) index lower on Thursday.
National Australia Bank (ASX:NAB-AU) was the biggest loser after going ex-dividend; shares tumbled 4.5 percent. Commonwealth Bank of Australia (ASX:CBA-AU), which announced first-quarter unaudited cash earnings of A$2.4 billion ($1.7 billion) early Thursday, gave up early gains and fell 1 percent. Westpac (ASX:WBC-AU) and Australia and New Zealand Banking (ASX:ANZ-AU) eased 0.5 and 0.8 percent respectively.
Miners struggled amid falling iron ore prices; major players such as BHP Billiton (London Stock Exchange: BLT-GB) and Rio Tinto (London Stock Exchange: RIO-GB) lost 0.8 and 1.4 percent respectively.
Gold counters also remained on the back foot after gold prices lingered near 1-month lows in Asian trade. Newcrest Mining (ASX:NCM-AU) and Evolution Mining (ASX:EVN-AU) slid more than 3 percent each, while Kingsgate Consolidated ended 6.2 percent lower.
Virgin Australia (ASX:VAH-AU) failed to get a boost from results which showed the airline swung back to profit in the first quarter. The stock retreated 1 percent.
Kospi sags 0.2%
South Korea's Kospi (Korea Stock Exchange: .KS11) index edged down in rangebound trade.
Among decliners, shipbuilders such as Daewoo Shipbuilding & Marine Engineering and Hyundai Mipo Dockyard slumped more than 2 percent each, while blue-chip Posco (Korea Stock Exchange: 549-KR) and Kepco closed down 0.3 and 0.9 percent respectively.
SK Telecom (Korea Stock Exchange: 1767-KR) lost early gains to slip 0.2 percent. The telco was in focus after reporting a 28.1 percent year-on-year decline in third-quarter net profit on Wednesday. Meanwhile, a statement by Fitch Ratings said the acquisition of cable television operator CJ HelloVision will likely boost SK Telecom's media business by broadening its subscriber base and strengthening its bundled services sales.
JKSE sheds 0.4%
Indonesia's benchmark Jakarta Composite (Jakarta Stock Exchange: .JKSE) index sagged after the country's third-quarter gross domestic product (GDP) came in narrowly below expectations.
The Indonesian economy expanded 4.73 percent on-year in the July-September period , slightly missing Reuters' estimates of 4.79 percent but above the 4.67 percent growth registered in the preceding quarter. The second-quarter GDP figure marked Indonesia's slowest pace of growth in six years, due to weak investment, falling consumer spending and low state expenditure.
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