Asia bourses mixed with Trump trades in focus

Thursday 02:30 GMT

Overview

Asian shares were mixed, with pharmaceutical stocks in the firing line following a broadside by US president-elect Donald Trump and Japanese exporters suffering from a strengthening yen.

Hot topic

Investors have spent the past day reassessing the implications of a Trump presidency. The US dollar reversed initial gains on Wednesday when Mr Trump, at a press conference in New York, gave no further detail about his proposed fiscal stimulus and infrastructure spending plans. The dollar index was down 0.2 per cent at 101.54 in Asia on Thursday, having shed 0.2 per cent overnight.

Mr Trump also took aim at the pharmaceutical industry, warning that his government would push more aggressively for lower drug prices. That weighed on US-listed healthcare stocks and their Asia-listed counterparts.

In Japan, pharmaceuticals was the Topix’s worst-performing sector, down 2.7 per cent, with Astellas Pharma down 3.9 per cent and Daiichi Sankyo off 1.2 per cent. Takeda Pharmaceuticals, which has been looking to expand its presence in the US and this week bought US-listed oncology group Ariad Pharmaceuticals for $5.2bn, fell 2.6 per cent. In Australia, CSL and Mayne Pharma were among the worst performers on the S&P/ASX 200.

Comments by Mr Trump also hit the Mexican peso, which was a quarter per cent weaker at 21.9132 per dollar in Asia and on pace for a fourth straight day of decline, which would mark its longest losing streak since mid-September. The peso hit a record low beyond 22 to the dollar on Wednesday after the president-elect threatened companies, such as carmakers, with a “major border tax” if they moved their manufacturing plants to Mexico.

Equities

Exporters in Japan were under pressure as the yen strengthened. The benchmark Topix was down 0.8 per cent and the Nikkei 225 shed 0.9 per cent.

Australia’s S&P/ASX 200 was the standout, lifted 0.2 per cent by a solid performance from banks and materials stocks.

Hong Kong’s Hang Seng was off 0.1 per cent. On the mainland, China’s Shanghai Composite was up 0.1 per cent and the technology-focused Shenzhen Composite was flat.

Forex

Currencies around Asia benefited from the dollar’s weakness, with the yen among the best performers, gaining 0.6 per cent to ¥‎114.67 per dollar.

The UK pound softened 0.1 per cent to $1.2201 in Asia, following a rally on Wednesday after Bank of England governor Mark Carney told members of parliament that Brexit was no longer the single biggest threat to the UK’s financial stability. The currency has been under pressure since comments at the weekend from Theresa May, UK prime minister, about the potential for a “hard Brexit”.

Commodities

Also benefiting from a softer US currency, gold was up 0.5 per cent at $1,197.66 an ounce — on track for a fourth straight day of gains and the longest winning run this year.

Brent crude oil, the international benchmark, was marginally lower at $55.09 a barrel, while West Texas Intermediate was 0.1 per cent weaker at $52.18 a barrel. Prices jumped by more than 2 per cent on Wednesday despite bearish US inventories data.

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