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ASIA-MARKETS-UPDATE
Asian markets end week down, more volatility tipped
HONG KONG, Oct 26, 2018 (BSS/AFP) – Asian markets fell Friday as trade
tensions and geopolitical worries kept investors from tracking a rebound on
Wall Street, with observers warning of further volatility to come.
The losses came at the end of a punishing week that witnessed steep losses
across the board, with several indexes wiping out their year’s gains as the
tech and energy sectors took a beating.
New York’s three main indexes provided some solace by posting healthy
gains thanks to some upbeat earnings but they are still down from last
Friday’s close with a feeling the bottom has not been found yet.
But analysts said there is a concern that even US markets have succumbed
to the hefty selling pressure, having managed to ride out much of the
volatility this year thanks to the strengthening domestic economy.
Dealers there are now feeling the pinch from the China-US trade row and
rising interest rates.
“Unlike the previous sell-off in 2018 that tended to hit a sector or two
at a time, the breadth of the latest rout (is) much more pronounced as it is
heavyweight champions of the US markets that are leading the way,” said
Stephen Innes, head of Asia-Pacific trade at OANDA.
“Indeed, this sell-off is entirely different as on top of the mountains of
geopolitical risk, US interest rates are rising quickly and mercilessly
squeezing financial conditions.”
He added that “everyone expects 2019 to be a real stinker”.
And Con Michalakis, chief investment officer at Statewide Super, told
Bloomberg TV: “You’re going to see a lot more volatility. It’s going to be a
feature of this environment.”
– ‘No-man’s land’ –
Hong Kong fell 1.1 percent while Tokyo ended 0.4 percent lower and
Shanghai 0.2 percent.
Singapore dived 1.4 percent and Seoul shed 1.8 percent, Taipei eased 0.3
percent and Bangkok skidded 0.5 percent.
However, Wellington was marginally higher and Manila added more than one
percent.
MORE/HR/1438
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
Energy firms failed to hold early gains, ending mixed and remaining under
pressure as oil prices continue to retreat from their four-year highs seen at
the start of the month.
The fall in prices comes as global demand dips, while data showed US
stockpiles had grown and tensions with Saudi Arabia simmering over the death
of a journalist. Dealers are also concerned about Riyadh’s pledge to increase
output to make up for shortfalls as Iranian crude is hit by US sanctions.
The euro struggled at two-month lows against the dollar after a brief
rally in response to European Central Bank chief Mario Draghi’s comments
playing down risks to the eurozone growth outlook.
“It seems that the market remains unconvinced on Draghi’s views that the
risk to the outlook remain ‘broadly balanced’,” said Rodrigo Catril, senior
forex strategist at National Australia Bank.
“Technically the euro is in no-man’s land and it seems that the market
wants to test the August low of $1.1301 before a material rebound can ensue.”
The greenback also held gains against sterling, with a Brexit deadline
approaching and London and Brussels still nowhere near a final agreement.
“It seems that at the moment no news is bad news for the pound, the clock
keeps on ticking and politicians remain unable to find a solution to the
Brexit deadlock,” Catril said.
In other forex trade the yuan continues to weaken against the dollar, with
the greenback approaching 10-year highs and homing in on the 7 yuan mark. The
Chinese unit has been hit by weakness in the world’s number two economy as
the US booms, with some oberservers suggesting authorities are allowing it to
depreciate to offset Washington’s trade war tariffs.
In early European trade London fell 1.3 percent, while Frankfurt and Paris
each shed more than one percent.
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: DOWN 0.4 percent at 21,184.60 (close)
Hong Kong – Hang Seng: DOWN 1.1 percent at 24,717.63 (close)
Shanghai – Composite: DOWN 0.2 percent at 2,598.85 (close)
London – FTSE 100: DOWN 1.3 percent at 6,916.72
Euro/dollar: DOWN at $1.1374 from $1.1375 at 2100 GMT
Pound/dollar: DOWN at $1.2810 from $1.2817
Dollar/yen: DOWN at 112.05 from 112.37 yen
Oil – West Texas Intermediate: DOWN 54 cents at $66.79
Oil – Brent Crude: DOWN 45 cents at $76.44
New York – Dow: UP 1.6 percent at 24,984.55 (close)
BSS/AFP/HR/1440