A sharp divergence is splitting the Asia-Pacific markets on Thursday, as South Korea’s benchmark index has surged to a new record high, while most other regional bourses are falling in a risk-off session driven by renewed US-China trade tensions.
The mixed performance comes after a negative and volatile day on Wall Street, where disappointing corporate earnings weighed on the major averages.
The Indian market is a notable exception, poised for a massive gap-up opening amid growing optimism over a potential US-India trade deal.
South Korea’s Kospi hits a record high after a central bank rate hold
South Korea’s Kospi index has risen 0.37% to hit a new all-time high after the country’s central bank, as expected, kept its benchmark interest rate unchanged at 2.5%.
In its statement, the central bank continued to flag the country’s high level of household debt as a key risk, a signal that it is not in a hurry to loosen monetary policy.
The record for the stock index was tempered by weakness in the currency, with the Korean won falling to its lowest level against the US dollar since May.
Broader Asian markets fall on renewed US-China trade fears
The positive sentiment in Seoul is a stark contrast to the mood elsewhere in the region, where a fresh wave of US-China trade fears is weighing on markets.
Reuters reported on Wednesday that the Trump administration is considering new curbs on exports to China that are made with US software, a move that could cover a wide range of products from laptops to jet engines.
The report sent a chill through the market, with Japan’s benchmark Nikkei 225 retreating 1.52% and mainland China’s CSI 300 falling 0.8%.
SoftBank shares tumble over 6% on a new bond issuance plan
A key drag on the Japanese market has been a more than 6% tumble in shares of the tech-investment giant SoftBank.
The sharp sell-off came after the company announced plans to issue new US-dollar and euro-denominated bonds to raise capital for its artificial intelligence investments.
The Japanese conglomerate will issue around 2 billion U.S. dollars worth of bonds in two tranches, along with about 750 million euros of hybrid notes.
Huge gap-up start is expected for the Indian market
The Indian stock market is set to be the day’s standout performer, with the Sensex and Nifty poised for a huge gap-up start.
The trends on the Gift Nifty indicated a massive premium of nearly 352 points over the Nifty futures’ previous close.
The powerful rally is being fueled by growing optimism over a potential US-India trade deal, a narrative that has completely overshadowed the broader regional weakness.
The post Asia markets open: Kospi hits record high; Nikkei falls 1.52%; Sensex to soar appeared first on Invezz