Asia shares retreat on fears China-US trade row might spread

TOKYO – Asian shares were mostly lower on Friday as worries that the trade standoff between the U.S. and China might expand put investors in a selling mood.

Japan’s benchmark Nikkei 225 fell 0.2% to finish at 21,117.22.


Australia’s S&P/ASX 200 lost 0.6% at 6,456.00. South Korea’s Kospi dropped 0.8% to 2,043.43.

Hong Kong’s Hang Seng edged 0.4% higher to 27,361.48, while the Shanghai Composite inched up 0.1% to 2,855.67.

“Finally, markets appear to be starting to price in the effect of an extended U.S.-China trade war on global growth,” Jeffrey Halley, senior market analyst at Oanda, said in a commentary.

Stocks ended sharply lower on Wall Street on Thursday in a broad sell-off that left the benchmark S&P 500 index on track for its third straight weekly loss and had the Dow Jones Industrial Average down more than 400 points until late afternoon.

Traders sought safety in the bond market, driving bond prices higher, which pulled the yield on the 10-year Treasury to 2.31%, the lowest level in more than a year.

It was at 2.33% by midday Friday in Asia.

The stock market has been gyrating since Washington and Beijing escalated their dispute over trade earlier this month. Now, the two sides have broken off negotiations and appear set for a long standoff.

Investors are concerned that a prolonged trade war could stunt economic growth and hurt corporate profits.

Overnight, President Donald Trump reiterated his complaints that China has “taken advantage” of the United States, with no hint of any progress in resolving the conflict over technology and Beijing’s industrial policies.

The S&P 500 index fell 1.2% to 2,822.24.

The index was down 2.5% before the selling eased. The Dow lost 1.1% to 25,490.47.

The Nasdaq composite dropped 1.6% to 7,628.28. The Russell 200 index of small company stocks gave up 2% to 1,501.38.

The U.S. and China concluded their 11th round of trade talks earlier this month with no agreement.

Instead, the U.S. moved to increase tariffs on Chinese goods, prompting China to reciprocate.

The trade dispute escalated further after the U.S. proposed restrictions on technology sales to China, though it has temporarily backed off.

China is looking for ways to retaliate and has reached out for support from Russia and its neighbors in Asia.

Both the U.S. and China have made overtures about continuing trade talks, but none are scheduled.

That uncertainty has many traders nervous about how and when the trade dispute will be resolved.

ENERGY: Benchmark U.S. crude rose 61 cents to $58.53 a barrel. It plunged 5.7% to settle at $57.91 a barrel on Thursday. Brent crude, the international standard, added 75 cents to $68.51 per barrel.

CURRENCIES: The dollar fell to 109.54 yen from 110.08 yen Thursday. The euro strengthened to $1.1196 from $1.1135. /gg

source: business.inquirer.net

Dollar edges up in Asia after New York sell-off

TOKYO — The dollar edged up against the yen in Asia on Friday after plunging on weak Chinese data which sparked worries over emerging markets.

In Tokyo afternoon trade, the dollar fetched 103.44 yen, up from 103.34 yen in New York Thursday afternoon but still nearly one yen lower than levels in Tokyo on Thursday.

The euro, which climbed Thursday on upbeat eurozone data, bought $1.3684 from $1.3692 in US trade Thursday while it was unchanged at 141.59 yen.

“Risk assets suffered as a much bigger than expected fall in Chinese manufacturing (activity) dented global sentiment,” Credit Agricole said.

Traders moved into the safe-haven yen Thursday as US shares sank on the weak China report and lacklustre corporate earnings, while they look ahead to a Federal Reserve policy meeting next week.

“The poor China data merely exacerbates the worries about emerging markets, and is pushing an acceleration in the investor pullout from these economies, which is not limited to China,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

The data from China — a key driver of global growth — fuelled concerns about emerging markets at a time when the Fed is winding down its stimulus programme, leading foreigners to repatriate their investments to the West.

Argentina’s peso was at 7.9 to the dollar Friday against 8.01 on Thursday, when it had plunged 11.1 percent in the sharpest one-day fall since 2002.

The South American nation is embroiled in a currency crisis that has seen the peso slump about 19 percent so far this year, creating challenges for a government wrestling with falling foreign reserves and mounting inflation.

Boosting the euro, a closely watched report Thursday showed private-sector activity in the eurozone hit a 31-month high in January as a modest recovery gathered pace across the economic bloc.

The dollar was mostly higher against other Asia-Pacific currencies.

It rose to 1,076.70 South Korean won from 1,072.76 won on Thursday, to 12,180 Indonesian rupiah from 12,168 rupiah and to 62.16 Indian rupees from 61.97 Indian rupees.

The dollar also firmed to 45.32 Philippine pesos from 45.30 pesos and to Tw$30.22 from Tw$30.19.

It slipped to 32.86 Thai baht from 32.97 baht and to Sg$1.2785 from Sg$1.2814.

The Australian dollar eased to 87.59 US cents from 87.98 cents, while the Chinese yuan weakened to 17.07 yen from 17.23 yen.

source: business.inquirer.net

Asian shares edge lower, reversing earlier gains

HONG KONG — Asian markets edged lower in holiday-hit trade on Monday, reversing earlier gains that were fuelled by upbeat US and Chinese manufacturing data as well as strong US auto sales.

The euro made a small gain after suffering selling pressure last week on expectations the European Central Bank (ECB) will cut interest rates at its next meeting Thursday.

Sydney slipped 0.38 percent, or 20.6 points, to close at 5,390.5 and Seoul fell 0.70 percent, or 14.25 points to 2,025.17. Shanghai closed flat, dipping 0.07 points to 2,149.63 and Hong Kong gave up 0.26 percent, or 60.17 points, to 23,189.62.

Tokyo and Mumbai were closed for public holidays.

US shares finished on a high Friday after figures showed manufacturing activity grew faster than expected in October. That came hours after China said its own purchasing managers’ index (PMI) came in at its highest level for 18 months.

News that October auto sales from the three largest US manufacturers — Chrysler, Ford and General Motors — saw double-digit percentage gains supported Wall Street Friday. The Dow added 0.45 percent, the S&P 500 tacked on 0.29 percent and the Nasdaq was flat.

Over the weekend data showed signs of growth in China’s services sector, as the official non-manufacturing PMI recorded its strongest reading in 14 months.

In China, attention is turning to a Communist Party policy meeting due to start Saturday, with traders looking for possible economic reforms.

Also, Washington will release third-quarter gross domestic product advanced estimates on Thursday and official October non-farm payrolls figures Friday.

On currency markets the euro ticked up slightly after tumbling last week on expectations the ECB would cut interest rates, after figures showed inflation in the region at a four-year low.

The euro bought $1.3492, compared with $1.3482 in New York but well down from $1.3750 on Wednesday. It was at 133.09 yen against 133.10 yen in New York.

“The eurozone has seen poor results in recent months, and there are serious concerns that the inflation rate has gone too low,” Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

“Investors will be watching if the ECB president Mario Draghi will indicate further monetary easing in the eurozone, with a new long-term refinancing option a viable option,” he said.

The dollar was at 98.65 yen from 98.69 yen in New York. The greenback is being buoyed by speculation the Federal Reserve will begin winding down its stimulus programme next month after it gave an upbeat assessment of the US economy last week.

Gold dropped to $1,313.15 at 0810 GMT compared with $1,316.15 on Friday.

In other markets:

– Taipei fell 0.41 percent, or 34.04 points, to 8,354.14.

Taiwan Semiconductor Manufacturing Co. was 0.46 percent lower at Tw$109.0 while chip design house MediaTek was up by its 7.0 percent daily limit at Tw$432.5.

– Wellington was flat, edging down 3.16 points to 4,910.68.

Fletcher Building fell 2.34 percent to NZ$9.60, Air New Zealand was off 0.57 percent at NZ$3.52 and telecoms firm Chorus climbed 0.38 percent at NZ$2.63.

– Manila closed 0.64 percent lower, giving up 41.99 points to 6,543.39.

Philippine Long Distance Telephone Co fell 1.60 percent to 2,824 pesos.

source: business.inquirer.net

Dollar sinks in Asia on US debt fears

TOKYO – The dollar fell in Asia Monday as investors fear a US budget deadlock in Washington could continue past a mid-October deadline to raise the country’s borrowing limit and cause a devastating default.

The greenback bought 97.08 yen in Tokyo, against 97.47 yen in New York Friday afternoon.

The euro was at $1.3567 and 131.76 yen, compared with $1.3557 and 132.14 yen.

Traders are buying the safe-haven yen on concerns US lawmakers – whose face-off has forced a government shutdown – will not strike a budget deal before October 17, when the government runs out of cash to pay its bills and could in turn default.

A similar showdown in 2011 saw the borrowing limit raise at the last minute but not before global stock markets tumbled while the crisis caused the downgrade of Washington’s sovereign debt rating.

US Treasury Secretary Jack Lew warned Sunday that Congress was “playing with fire” as Republican House leader John Boehner said the party would not raise the US debt ceiling without spending cuts.

“If anything both sides have become more entrenched in their positions, implying that any agreement on raising the debt ceiling… also looks out of reach,” Credit Agricole said.

“Market reaction so far has been relatively muted in the expectation of an agreement but such hopes may prove optimistic,” it added.

The government shutdown, which is entering its seventh day, has also affected the release of US economic data with no clarity on when key non-farm payrolls data, originally due out last week, will be published.

source: business.inquirer.net