Asian markets mixed Queensland floods weighing on the Aussie dollar

Asian markets were mixed on Tuesday with Singapore shares reversing earlier losses and ending 0.26% higher at the midday break.

Chinese shipbuilder Yangzijiang (YAZG.SI) was among the top gainers, rising 2.6% to SGD 1.99 after Credit Suisse raised its target price to SGD2.40 from SGD 2.20 and kept its “ outperform” rating. Shares of Sinren Aluminum (XIRN.SI) rose 4.6% to SGD 0.575, boosted by strong earnings from larger peer Alcoa Inc.

The Shanghai Composite Index fell 0.3% as investors moved out of small caps into large caps stocks, such as property companies, despite a report that Shanghai was likely to impose a property tax.

Huaxin Cement (600801), the biggest loser in the Shanghai market, plunged by 10% of its daily limit and property firm Gemdale Co (600383), the most active stock in Shanghai market, rose 4.8%, while China Vanke (000002), the most active in the Shenzhen market, was up 2.8%.

The Hong Kong market rose 0.97% before the lunch break. Shares of real estate companies rose on rebounding transaction volumes and prices. Sun Hung Kai Properties (0016.HK) rose 1.5%, Cheung Kong Holdings (0001.HK) rose 1.8% and company said to be planning the first yuan-denominated listing in Hong Kong later this quarter, giving a further boost to Hong Kong’s status as the world’s offshore renminbi centre.

In Australia, the Australian dollar took a hit this morning, falling as low as 0.9842 on the back of lower than expected trade surplus data.

The Aussie is getting hit from three directions at the moment. First, there is the rebound in the US dollar (on the back of some positive economic news from the US). Then there is the continuing concern on the flooding in Queensland, which looks like spreading into other areas as well. The third and latest factor is the much lower trade surplus that was reported this morning.

We saw the Aussie being sold off immediately after the trade figures were released this morning. This tells me that some traders were on the ready to short the Aussie. At this stage, the Aussie chart is showing tentative support at the 0.9800 level, but we could see this breached once the European and UK markets open.

The flooding in Queensland may further damage the trade surplus in the coming months. This is because some coal miners and transport related companies have already come out saying their production will definitely be affected by this calamity.