South Korea stocks lag in Asia Pacific; China keeps benchmark lending rate unchanged

Stocks in Asia Pacific dipped in Thursday morning trade as China kept its benchmark lending rate on hold.

South Korean stocks led losses regionally, with the Kospi dropping 2.59% while Kosdaq index plunged 3.78%. The moves came as local news agency Yonhap reported daily new coronavirus cases in the country rising by triple digits for the seventh straight day.

Hong Kong’s Hang Seng index also dropped 1.52%. Mainland Chinese stocks dipped in early trade, with the Shanghai composite down about 0.4% while the Shenzhen component dipped 0.119%.

In Japan, the Nikkei 225 slipped 0.73% while the Topix index shed 0.59%.

Over in Australia, the S&P/ASX 200 declined 0.9%.

Overall, the MSCI Asia ex-Japan index traded 1.29% lower.

China on Thursday announced no changes to its benchmark lending rate, with the one-year loan prime rate (LPR) kept at 3.85%, while the five-year LPR was on hold at 4.65%. That was in line with expectations from the majority of the participants in a Reuters survey who predicted no change to either rate.

Markets in Indonesia and Malaysia are closed on Thursday for a holiday.

Federal Open Market Committee members agreed at their latest meeting in late July that the ongoing situation surrounding the coronavirus pandemic could “weigh heavily on economic activity, employment, and inflation in the near term and was posing considerable risks to the economic outlook over the medium term,” according to the meeting minutes. The U.S. central bank kept rates unchanged last month.

Overnight on Wall Street, the S&P 500 fell 0.4% to close at 3,374.85. The Dow Jones Industrial Average slipped 85.19 points, or 0.3%, to finish its trading day stateside at 27,692.88. The Nasdaq Composite lagged, declining 0.6% to close at 11,146.46.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.053 after seeing an earlier spike from levels below 92.5.

The Japanese yen traded at 106.10 per dollar following a weakening yesterday from levels below 105.6 against the greenback. The Australian dollar changed hands at $0.7172 after dropping from above $0.725 yesterday.

Oil prices were lower in the morning of Asian trading hours, with international benchmark Brent crude futures down 0.68% to $45.06 per barrel. U.S. crude futures also shed 0.82% to $42.58 per barrel.

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