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Asia bourses subdued as US dollar continues to struggle

Wednesday 03:25 BST

Overview

Stock markets around Asia were mixed but subdued as investors took their cue from declines on Wall Street and a drop in the US dollar to its lowest level since early October.

Hot topic

Data showed Australia’s economy grew 0.3 per cent quarter-on-quarter in the first three months of the year, slowing from 1.1 per cent growth in the December quarter but matching economists’ expectations.

The annual rate of growth, at 1.7 per cent, was the slowest since 2009.

The market had been primed for a soft result after weak exports data on Tuesday prompted a number of economists to pare their GDP forecasts. However, the headline figure meeting expectations was a relief, and helped lift the Australian dollar 0.5 per cent to a six-week high of $0.7542 against its US counterpart.

Equities

Japan’s benchmark Topix was down 0.2 per cent. Toshiba was among the best performing big-name stocks in the wake of reports that the troubled conglomerate has narrowed potential bidders for its prized chip unit to Broadcom or Western Digital.

Australia’s S&P/ASX 200 was off 0.1 per cent, with declines for consumer staples and industrials offsetting modest gains for heavyweight financials and materials stocks. Vocus Group jumped as much as 23 per cent after the telecom company received a A$2.2bn ($1.6bn) takeover proposal from KKR.

Hong Kong’s Hang Seng index added 0.1 per cent. AAC Technologies gained 17 per cent after resuming trading for the first time since mid-May. The Apple supplier came under fire from a short seller report last month, but on Wednesday dismissed the claims in that report as “groundless, false or misleading”.

On the mainland, China’s Shanghai Composite was up 0.9 per cent while the technology-focused Shenzhen Composite gained 1.2 per cent.

In Singapore, where the benchmark Straits Times index was up 0.4 per cent, Noble climbed 3.2 per cent after an early drop of more than 6 per cent. Investors were digesting news that the troubled commodities trader’s main lenders are in last-ditch talks over whether to allow it more time to find a white knight or force it into restructuring or liquidation.

The S&P 500 fell 0.3 per cent on Tuesday in New York

Forex

The dollar index, a measure of the US currency against a basket of global peers, was fractionally lower at 96.626. It closed on Tuesday at its lowest level since October 7.

Despite weakness in the US dollar, nearly all other major currencies were weaker as well. The Japanese yen was down 0.1 per cent at ¥109.52 in Asia, having gained 0.9 per cent on Tuesday to its strongest point in six weeks.

The UK pound and the euro were each down 0.1 per cent against the dollar.

Commodities

Brent crude, the international oil benchmark, was down 0.2 per cent at $50.03 a barrel while West Texas Intermediate was off 0.2 per cent at $48.09.

Oil prices have been volatile this week after several Arab states — led by Saudi Arabia — severed diplomatic ties with Qatar, raising uncertainty about recently agreed cuts to output by Opec and non-Opec oil producers. Brent closed 1.3 per cent higher on Tuesday.

Gold was down 0.2 per cent at $1,291.78 in Asia trading.

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