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Asian shares swing after Wall St fall, bargain-buyers add support
HONG KONG, Oct 29, 2018 (BSS/AFP) – Asian stocks fluctuated Monday with
investors still on edge after last week’s rout, with caution after another
hammering for Wall Street offsetting bargain-buying.
Even a forecast-busting jump in US economic growth in the third quarter
was not enough to prevent all three main indexes in New York from tanking,
with the Dow and S&P 500 falling into negative territory for the year.
The US losses came after disappointing earnings reports from titans
Alphabet and Amazon, which compounded concerns about rising interest rates
and the China-US trade war that shows no sign of abating.
“Fears of an economic slowdown in the US proved to be premature, but
investors worry that the boost from (Donald) Trump tax cuts is evaporating,”
said Alfonso Esparza, senior market analyst at OANDA.
“Stocks have been vulnerable as the US Federal Reserve stands firm on its
plans to hike one more time this year and three or four in 2019 on its path
to rate normalisation. US-China relations have not improved and earning
reports have started to reflect the impact of tariffs on China.”
Hong Kong fell 0.1 percent in the afternoon after moving between gains and
losses, while Tokyo ended 0.2 percent off and Shanghai lost more than two
percent. Seoul shed 1.5 percent.
But Sydney climbed 1.1 percent, Singapore added 0.5 percent, Wellington
put on 0.6 percent and Jakarta was 0.4 percent down.
“I still think there is room for a bit of a downside to go because I do
see this as being largely a structural shift in markets,” Kyle Rodda, a
market analyst at IG Group in Melbourne, told Bloomberg Television.
“The overall sentiment is still to the downside, is still quite bearish
and there will be a little while for this correction to play out.”
– Merkel’s misery –
Attention now turns to the release later this week of US jobs data for a
fresh glimpse at the world’s top economy.
The dollar was mostly up against higher-yielding and emerging market
currencies including the Mexican peso, Australian dollar, the Indonesian
rupiah and Thai baht.
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It was also up against the yuan, with weak industrial profits data and
speculation of fresh monetary easing putting downward pressure on the Chinese
unit, which is sitting close to a 10-year low.
However, reports said Beijing was keeping an eye on the currency market
and was ready to support the yuan and prevent it from falling past 7 to the
dollar.
There is speculation that authorities are allowing the unit to weaken to
offset the effects of US tariffs, though Washington has held off labelling
China a currency manipulator.
The euro struggled against the greenback after German Chancellor Angela
Merkel’s fragile coalition government suffered heavy losses in a key regional
election and a junior partner threatened to quit, which would likely spark a
fresh general election.
And oil prices dipped as investors weighed the prospects of slower demand
against looming US sanctions against Iranian crude exports.
The commodity, which was sitting near four-year highs at the start of the
month, has tumbled in recent weeks on worries about demand and worries about
the China-US trade war.
“Crude oil prices receded further south last week as investor sentiments
struggled on weaker economic projections and fear-mongering from a crash in
global stock markets,” said Benjamin Lu, commodities analyst with Phillip
Futures in Singapore.
“Cooling economic conditions and symptoms of softer international trade
has exacerbated bearish conditions as growth outlook dims,” he added.
– Key figures around 0710 GMT –
Tokyo – Nikkei 225: DOWN 0.2 percent at 21,149.80 (close)
Hong Kong – Hang Seng: DOWN 0.1 percent at 24,703.37
Shanghai – Composite: DOWN 2.2 percent at 2,542.10 (close)
Euro/dollar: DOWN at $1.1391 from $1.1400 at 2100 GMT Friday
Pound/dollar: UP at $1.2833 from $1.2800
Dollar/yen: UP at 111.94 from 111.83 yen
Oil – West Texas Intermediate: DOWN 23 cents at $67.36 per barrel
Oil – Brent Crude: DOWN 32 cents at $77.30 per barrel
New York – Dow: DOWN 1.2 percent at 24,688.31 (close)
London – FTSE 100: DOWN 1.4 percent at 6,906.09 (close)
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