Equities drift lower ahead of US GDP, Japan CPI

Asian equities are drifting lower in light trading on Thursday (28 August), a day ahead of market-sensitive GDP revisions for the US and inflation data from Japan, writes FastFT.

Tokyo’s Nikkei 225 and Sydney’s S&P/ASX 200 each fell half a per cent, as momentum from earlier in the week fades.

Overnight, the S&P 500 was unmoved from its record high just above 2,000, in a session void of meaningful news.

The Japanese yen, which is perceived as a haven currency, is strengthening modestly for a second straight day, reflecting a pause in appetite for riskier assets.

In Greater China, the mood was less downbeat. Hong Kong’s Hang Seng rose 0.3 per cent, led by telecom stocks. The Shanghai Composite was flat. Trading volume in both was a fifth below the 30-day average, suggesting little conviction.

Among big movers, Qantas shares rose nearly 8 per cent - the biggest gain of 2014 - despite reporting a record full year net loss of A$2.84bn.

Investors looked beyond the writedown-driven headline figure, as the underlying loss was narrower than expected and CEO Alan Joyce projected the national carrier would swing to an underlying profit in the first half of the current year.

Shares in Country Garden, one of China’s largest property developers dropped more than 6 per cent after it launched a 1-for-15 rights issue, giving investors new shares at a 31 per cent discount to the last closing price. Country Garden raised $410m in the offering, to pay debts and lower its leverage as the country’s property slowdown deepens.

Billabong shares fell 2.7 per cent after the surfwear maker posted a full year net loss of A$233.7m, narrower than the A$859.5m loss in the previous year.

In currencies, the Australian dollar rose 0.4 per cent after fresh data suggested Australia is having some success in rebalancing the economy while the mining boom cools.

The government’s seasonally-adjusted estimate for new capital expenditure rose 1.1 per cent in the quarter to June, versus forecasts for a 0.9 per cent decline.

The Philippines’ peso gained 0.1 per cent after GDP results beat forecasts. The economy grew 6.4 per cent between April and June, year on year, versus 5.6 per cent in the first quarter.

Manufacturing led the economy with a 10.8 per cent annual rise, while services remained healthy.

Barclays said it sees further acceleration in the second half of the year, “given better government spending and supportive external demand.”