Print

Mail

wiki links

Dollar slide too much for Asian markets to ignore

Asian stock markets closed lower on Friday as an otherwise uneventful day turned volatile after a radical downturn in the US dollar, dealers said.

They said investors have largely got used to the idea the dollar will go lower but the sharp and very rapid slump in the US unit to record lows against the euro was too much to be ignored, leading to a prompt sell-off in afternoon trade.

The trigger for the dollar was a Chinese report that Beijing would cut its holding of US dollar assets in view of the sustained falls in the currency.

Some of the damage in the US dollar and stocks was repaired when further reports out of China modified the initial news but the episode will have driven home the point that much is riding on the outlook of the US currency.

Dealers said the reaction was also muted in some part by the fact that New York was closed overnight for the Thanksgiving holiday.

Despite the negative backdrop on the currency front, Sydney once again powered to a record close, with some now talking confidently that the 4,000 points level could be in sight for the wonder market of the region.

The TAIEX closed 1.35 percent lower, reversing early gains as profit-taking set in led by the financials and key tech stocks, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), dealers said.

They said the market continues to correct after its recent advance above 6,000 points, which is clearly a major resistance level.

The TAIEX closed down 76.59 points at 5,778.65, off a high of 5,935.20, on turnover of NT$87.1 billion (US$2.7 billion).

Decliners led gainers 556 to 110, with 110 stocks unchanged.

"There were expectations of resistance around 6,000 points," said Aaron Huang, vice president with Yuanta Core Pacific Securities Co (元大京華證券).

"Riding on gains made in early trade, investors locked in profits late in the session given some caution ahead of the weekend," Huang said.

"Many anticipate consolidation for the local bourse and investors were unwilling to make any aggressive moves," he added.

TSMC closed down NT$0.70 to NT$47.60, UMC shed NT$0.40 to NT$20.00 and AU Optronics Corp fell NT$0.20 to NT$41.00.

Japanese share prices closed 0.61 percent lower in cautious trade on continued concerns that a stronger yen could hurt exports, the driver for the country's recovery, dealers said. The Tokyo Stock Exchange's benchmark NIKKEI-225 index lost 66.59 points to 10,833.75. The broader TOPIX index of all First Section shares fell 3.24 points or 0.30 percent to 1,091.21.

South Korean share prices closed 1.65 percent lower, reversing early gains with sentiment undercut as the won rose to 7-year highs against the dollar to spark increasing concerns over the country's export performance, dealers said.

The KOSPI index closed down 14.37 points at 858.12, off a low of 856.89.

Hong Kong share prices closed 0.23 percent lower, giving up early gains on profit-taking ahead of the weekend, dealers said. They said trade was cautious, with investors unsettled by the sharp sell-off in the dollar in the afternoon.

The key Hang Seng Index closed down 31.58 points at 13,895.03, off a low of 13,856.10 and high of 14,009.13.

The Hang Seng China Enterprises Index of locally traded China stocks was up 23.97 points or 0.49 percent at 4,934.39.

"There was resistance at the 14,000 level and most investors were cautious ahead of the weekend. Trading was confined within a narrow 150-point range and there was profit-taking as the market consolidated," said Howard Gorges, vice chairman at South China Securities.

Share prices in China closed little changed, with Shanghai easier on profit-taking in blue chips and the retailers while Shenzhen found some support after news the local government has completed guidelines to restructure listed companies, dealers said.

The Shanghai A-share Index fell 1.72 points or 0.12 percent to 1,424.38 while the Shenzhen A-share Index was up 1.16 points or 0.32 percent at 360.16. The benchmark Shanghai Composite Index, which covers both A- and B-shares, closed down 1.61 points or 0.12 percent at 1,356.73.

Australian share prices rose 0.2 percent to yet another all-time record high, supported by strong market fundamentals and increasing returns from capital management programs, dealers said.

They said cash returned to shareholders in the form of share buy-backs and increased dividends is in turn coming back into the market, pushing prices higher on expectations of further capital gains and continuing dividend income streams.

The benchmark SP/ASX 200 index rose 7.9 points to 3,912.1 after hitting a high for the day of 3,917.8, while the broader All Ordinaries index rose 8.1 points to a record finish of 3,922.9.

Singapore share prices closed 0.32 percent lower on profit-taking in blue chips although last-minute bargain hunting limited the downturn, dealers said. The Straits Times Index fell 6.45 points to 2,028.43, off a low of 2,021.48, while the All-Singapore Equities index declined 2.27 points to 519.88.

Malaysian share prices closed 0.39 percent higher in volatile trade as late buying by local funds helped reverse losses in the afternoon, dealers said.

The Kuala Lumpur Composite Index (KLCI) was up 3.56 points at 908.72, after trading between 911.92 and 904.24.

Thai share prices closed 0.19 percent higher in lackluster trade, with investors unsettled by the sharp fall in the dollar and its potential impact on exports, dealers said. The Stock Exchange of Thailand (SET) composite index added 1.26 points at 648.75 points and the blue-chip SET 50 index was up 0.03 points at 45.47.
This story has been viewed 2096 times.