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Asia markets mostly tad higher; Australia banks fall after Moody's outlook cut

CNBC logo CNBC 19-08-2016 Saheli Roy Choudhury

Asia markets opened modestly higher on Friday, following a surge in overnight oil prices that pushed U.S. equities up, with the Japanese markets rebounding slightly as the yen eased, 

The benchmark Nikkei 225 (.N225) was up 0.42 percent, while the Topix (.SPTPXN) traded up 0.32 percent. The Japanese yen (OSEJPY=) was relatively weaker against the greenback, trading at 100.21 as of 8:13 a.m. HK/SIN, compared with levels as high as 99.62 on the previous day.

The currency weakness helped push up shares of major exporters surge, with Toyota up 2 percent, Honda adding 2.39 percent and Mazda gaining 2.32 percent.

Across the Korean Strait, the Kospi (.KS11) was flat at 2,055.15. In Australia, the benchmark ASX 200 (.AXJO) added 0.1 percent, with a 0.26 decline in the heavily-weighted financials sub-index offset by gains in the energy and materials sectors.

Stateside, major indexes closed higher, with the S&P 500 (.SPX) up 0.22 percent at 2,187.02. 

Oil prices rose overnight on further news suggesting OPEC and other major exporters could consider a deal to tackle the global oversupply. U.S. crude futures rose 3.06 percent to $48.22 on Thursday, while global benchmark Brent added 2.09 percent to $50.89.

"The bounce in oil was helped along by further jawboning from the former president of OPEC, Chakib Khelil, who stated that an OPEC supply-freeze deal was on course because its biggest members were already producing at record levels," said Angus Nicholson, a market analyst at spreadbettor IG.

Khelil made his remarks during an interview with Bloomberg Television earlier this week.

In the currency market, the dollar (=USD) slipped further against a basket of currencies, trading at 94.157, compared with levels near 94.468 on Thursday afternoon Asia time.

Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said investors were not yet convinced of the seriousness of the risk that the Fed might raise rates later this year.

"The market clearly believes that [policymakers] need to see consistently strong data to justify tightening this close to the U.S. Presidential election," she said.

Major Australian banks sold off in early trade, with shares of the National Bank of Australia (NAB'A-AU) tumbling 1.14 percent.

On Friday morning, ratings agency Moody's revised the rating outlooks of five Australian banks to negative from stable. The banks with revised outlooks include the country's so-called Big Four - ANZ (ANZ'A-AU), Commonwealth Bank of Australia (CBA'A-AU), NAB and Westpac (WBC'B-AU).

"The outlook change for Australia's four major banks reflects Moody's expectation of a more challenging operating environment for banks in Australia for the remainder of 2016 and beyond, which could lead to a deterioration in their profit growth and asset quality, as well as increase in their sensitivity to external shocks," said Moody's in a note.

The major banks have been under pressure this year due to rising bad debts due to their exposure to the resources sectors which had suffered due to a global slump in commodity prices.

In company news, shares of Samsung Electronics traded up 0.43 percent, at 1,647,000 won. The smartphone giant's shares hit an all-time closing high on Thursday, giving it a market capitalization of 232 trillion won ($210 billion), as investors cheered the company's turnaround plans.

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