IPXHY Inpex Corp (PK)

By Chao Deng 

Shares in Asia were mixed Thursday, with some investors staying on the sidelines ahead of the European Central Bank's policy announcement this evening.

Japan's Nikkei Stock Average finished up 1.3% and South Korea's Kospi gained 0.8%. But Australia's S&P/ASX 200 slipped 0.1% and Hong Kong's Hang Seng Index finished down essentially flat.

Chinese stocks had another choppy day, with the Shanghai Composite Index finishing down 2% amid worries that Beijing may tighten liquidity. Trading volumes on the mainland on Thursday shrank significantly to 354.6 billion yuan, from 426.1 billion yuan the day before, according to Wind, reflecting sluggish sentiment.

"It's a period of apprehension [going] into policy meetings," said Bill Bowler, an equities trader at Forsyth Barr Asia Ltd., referring to investors' expectations for central banks in Europe, the U.S. and Japan to announce their latest decisions on monetary policy.

Most investors expect Europe to boost stimulus, possibly by expanding its negative-rate policy on Thursday, although there is apprehension about the extent of easing and what impact the moves will have on the region's banks.

A rally in U.S. oil prices overnight pushed up Asia's energy stocks. The energy sector was up 0.6% in Australia, and it was one of the few sectors that gained in a down day in Hong Kong, up 0.8% there.

Early in the Asia day, an unexpected rate cut by New Zealand's central bank spurred buying. The country's main stock benchmark finished up 0.8%, while the local New Zealand dollar dropped sharply in value. The Reserve Bank of New Zealand announced it was cutting the benchmark rate by 25 basis points to 2.25% and indicated that more cuts might be coming.

South Korea's won weakened slightly after the Bank of Korea opted to keep its benchmark interest rate unchanged at 1.5%, but recovered later in the day to trade up 0.8% against the U.S. dollar. The bank's decision was largely anticipated by economists.

In China, investors remain intensely focused on the National People's Congress, an ongoing legislative meeting taking place in Beijing through mid-month.

"The seasonality of the NPC is playing out close to how it usually does, " with stocks running up ahead of the meetings but turning pretty flat and choppy during it, said Mr. Bowler.

Worries that China could soon revise its securities law led to selling in Chinese brokerage stocks late in the trading session. Banks didn't rally right before the close as they did the previous two sessions. Analysts have associated a rise in blue-chips, including banks, with possible intervention by state-backed funds.

Data this morning showed China's consumer inflation picked up in February, raising the possibility that authorities may reign in liquidity to prevent deepening inflation. The consumer price index rose 2.3% from a year earlier, quicker than a 1.8% increase in January.

Yifan Xie contributed to this article.

Write to Chao Deng at Chao.Deng@wsj.com

(END) Dow Jones Newswires

March 10, 2016 04:57 ET (09:57 GMT)

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