Tokyo, Japan (BBN) – Asian markets traded mixed on Wednesday, despite US gains following remarks from Federal Reserve Chair Janet Yellen. Shares of Toshiba tumbled.
Toshiba shares dropped 8.75 per cent to end at 209.7 yen in Tokyo after Reuters reported the company would book a $6.3 billion hit to its US nuclear unit and may sell more of its prized flash-memory chip business to urgently raise funds, reports CNBC.
Reuters added, citing a source, that the Japanese company’s loans from banks and insurers stood at $7 billion.
Nomura said in a note dated February 14, it was changing its rating on Toshiba from Buy to Suspended.
Analyst Masaya Yamasaki said in the note that Nomura’s view on Toshiba had centered on the potential for the memory business.
“The company announced for the first time today that it is considering selling a majority stake in the memory business along with other options for injecting capital from outside sources, making it difficult to price in the memory business’ potential,” said Yamasaki.
Meanwhile, the Wall Street Journal reported that Toshiba chairman Shigenori Shiga would resign from his post effective Wednesday, while the former chief executive of Toshiba’s US nuclear-plant business Westinghouse Electric, Danny Roderick, was stripped of his executive post, the Journal said.
In other Japanese corporate activity, internet and telecom giant SoftBank announced a $3.3 billion cash acquisition of asset manager Fortress Investment Group.
SoftBank shares climbed 1.58 per cent to 8,670 yen.
Japanese banks and financial companies finished higher, with Mitsubishi UFJ up 1.71 per cent, SMFG up 1.37 percent and Mizuho Financial gaining 1.15 per cent.
The Nikkei Stock Average climbed 199 points, or 1.03 per cent, to finish at 19,437.98, while the Topix added 14.57 points, or 0.95 per cent, to 1,553.69.
Across the Korean Strait, the Kospi finished up 9.29 points, or 0.45 per cent, at 2,083.86.
In Hong Kong, the Hang Seng index added 1.29 per cent in late-afternoon trade, while Chinese mainland shares slipped slightly by market close.
The Shanghai composite fell 5.20 points, or 0.16 per cent, to 3,212.71, while the Shenzhen composite shed 17.28 points, or 0.88 per cent, to 1,947.04.
Australia’s benchmark ASX 200 climbed 53.83 points, or 0.94 per cent, to 5,809.07, as most sectors finished higher.
The heavily-weighted financial sector was up 1.70 percent, with major banks gaining more than 1 per cent each.
Shares of ANZ gained 1.28 percent, Commonwealth Bank of Australia rose 2.30 per cent, Westpac added 1.77 per cent and National Australia Bank climbed 2.43 percent.
Major miner BHP Billiton gained 1.26 percent.
Reuters reported that striking workers at Chile’s massive Escondida copper mine and BHP, which operates the mine, have agreed to renew talks on Wednesday.
The mine produced over 1 million tonnes of copper, about 5 per cent of the world’s total in 2016, according to Reuters. Copper prices rose 0.58 per cent to $6,056 a tonne on Wednesday morning, after falling to $6,021 in the previous session.
Fed Chair Yellen said in prepared remarks to Congress that waiting too long to raise interest rates would be “unwise,” given the rise in inflation and economic growth.
Rodrigo Catril, a currency strategist at National Australia Bank, said in a note the remarks “triggered a sell-off in US Treasury yields and a broad dollar rally as she left the door open for a rate hike as soon as the next Federal Open Market Committee meeting in March.”
The dollar climbed against a basket of currencies to trade at 101.29 at 3:36pm HK/SIN on Wednesday, from levels below 100.8 in the previous session.
Among major currency pairs, the yen weakened slightly against the dollar to trade at 114.53, down from an earlier high of 114.19.
The euro fetched $1.0570, while the Australian dollar traded at $0.7665.
Some analysts believe the dollar could extend gains as Yellen continues her testimony before Congress on Wednesday.
On Wall Street on Tuesday, the Dow Jones industrial average rose 92.25 points, or 0.45 per cent, to end at 20,504.41.
The S&P 500 index gained 9.33 points, or 0.40 per cent, to close at 2,337.58, while the Nasdaq advanced 18.62 points, or 0.32 per cent, to end at 5,782.57.