South Korea’s Central Bank Keeps Interest Rates Unchanged
South Korea’s central bank has decided to keep its benchmark interest rate unchanged at 2.5% for the second consecutive meeting. The decision was made due to global trade uncertainty. Patrick Munnelly, market strategy partner at TickMill, noted that the momentum of the record-breaking rally remains strong, despite Nvidia’s sales forecast falling short of expectations.
Impact of Nvidia’s Sales Forecast on the Market
Nvidia’s shares fell 3% in after-hours trading, but Chinese technology stocks experienced significant gains, contributing to broader market resilience. Munnelly pointed out that while Nvidia’s sales forecast was disappointing, the overall market remains strong. He also noted that in Japan, a Thursday auction for two-year government bonds saw weaker demand than the average over the past year, as investors are wary of potential interest rate hikes by the Bank of Japan this year.
Market Performance in Asia
The Kospi 100 in Seoul rose 0.33% to 3,233.26, led by HD Korea Shipbuilding & Offshore Engineering, up 10.55%, SK Holdings, up 9.44%, and SK Square, up 6.93%. Japan’s Nikkei 225 advanced 0.76% to 42,842.00, with Fujikura climbing 5.52%, Inpex adding 4.33%, and Alps Electric up 4.28%. The broader Topix index gained 0.65% to 3,089.78.
Performance of Other Asian Markets
Mainland Chinese equities outperformed, with the Shanghai Composite rising 1.14% to 3,843.60 and the Shenzhen Component climbing 2.25% to 12,571.37. Zhejiang Tuna Environmental Science & Technology, Apple Flavor & Fragrance Group, and Keeson Technology all hit the 10% upside limit. In contrast, Hong Kong’s Hang Seng Index fell 0.81% to 24,998.82, dragged lower by Meituan, down 12.55%, ANTA Sports Products, off 5.91%, and JD.com, down 5.03%.
Australia and New Zealand Market Performance
In Australia, the S&P/ASX 200 rose 0.22% to 8,980.00, lifted by Qantas Airways, which gained 9.09% after reporting a 15% rise in underlying profit before tax to AUD 2.39bn, beating estimates. AP Eagers jumped 12.02% and Generation Development Group added 6.75%. Across the Tasman Sea, New Zealand’s S&P/NZX 50 index gained 0.32% to 12,903.08, supported by Meridian Energy, up 3.51%, A2 Milk Company, up 3.5%, and Sky Network Television, up 2.9%.
Currency and Oil Prices
In currencies, the dollar was last down 0.2% on the yen to trade at JPY 147.13, as it fell 0.21% against the Aussie to AUD 1.5339, and eased 0.12% on the Kiwi to change hands at NZD 1.7048. Oil prices retreated, with Brent crude futures last down 0.75% on ICE at $67.54 per barrel, and the NYMEX quote for West Texas Intermediate falling 0.75% to $63.67.
Bank of Korea’s Decision and New Zealand Business Confidence
The Bank of Korea held its benchmark rate at 2.5% for a second consecutive meeting, in line with market expectations, while noting that inflation remained stable and growth had shown "modest improvement." However, it warned that household debt and housing prices in Seoul and surrounding regions required close monitoring despite a recent slowdown in loan growth. In New Zealand, fresh business confidence surveys offered a mixed view of the economy. The ANZ Business Outlook for August showed headline confidence rising two points to a net 50%, but firms’ expectations for their own activity fell two points to a net 39%.
Conclusion
In conclusion, the decision by South Korea’s central bank to keep interest rates unchanged has had a mixed impact on the market. While some stocks have risen, others have fallen. The performance of other Asian markets has also been mixed, with some indices rising and others falling. The currency and oil prices have also been affected, with the dollar falling against the yen and oil prices retreating. The Bank of Korea’s decision and New Zealand business confidence surveys have provided a mixed view of the economy, with some indicators rising and others falling. Overall, the market remains strong, but there are concerns about global trade uncertainty and potential interest rate hikes.
