Asian markets sank further in holiday-thinned trade yesterday, following another global sell-off caused by anxieties over emerging markets and further disappointing manufacturing data out of China.
The euro edged up against the yen after falling in New York in response to weak eurozone inflation figures that added to fears of deflation in the currency bloc.
Tokyo fell 1.98 percent, or 295.40 points, to 14,619.13 and Seoul slipped 1.09 percent, or 21.19 points, to 1,919.96.
Photo: Reuters
Sydney closed flat, edging down 2.1 points to 5,187.9 while Wellington eased 0.51 percent, or 25.08 points, to 4,849.50.
However, Bangkok was up 1.10 percent despite chaotic weekend elections that saw thousands of polling stations closed by opposition protestors following weeks of anti-government demonstrations.
Taipei, Shanghai, Hong Kong, and Kuala Lumpur were closed for the Lunar New Year holiday.
Global equities tanked last week after the US Federal Reserve said it would further cut its stimulus program, sparking fears of a flight of capital from developing nations while also sending their currencies falling against the US dollar.
That in turn was fueling buying of the yen, which was being viewed as safe haven, and that was helping send regional stocks lower, Toyo Securities Co strategist Hiroaki Hiwada said.
The stock fall in New York was also weighing on investor sentiment, he said.
“There is little good news to trade on. Maybe by next week, people will start to buy shares back,” Hiwada said.
On Friday the Dow sank 0.94 percent, the S&P 500 fell 0.65 percent and the NASDAQ lost 0.47 percent.
Earlier in Europe the FTSE 100 in London ended 0.43 percent lower, Frankfurt’s DAX 30 dropped 0.71 percent and the CAC 40 in Paris slid 0.34 percent.
The euro was little changed at US$1.3485. The US dollar rose to ￥102.23 from ￥101.96 late on Friday, but is down from about ￥105 at the beginning of the year.
“There’s still some nervousness about emerging markets,” investment adviser Christopher Macdonald told Dow Jones Newswires. “People are wondering if the jitters we saw last month are a sign of some bigger dislocation in the market.”
Adding to the downbeat outlook was official data from China pointing to a slowdown in manufacturing activity in the world’s second-largest economy and key driver of global growth.
The purchasing managers’ index (PMI) fell to 50.5 last month from 51 in December last year and 51.4 in November, the Chinese National Bureau of Statistics and the China Federation of Logistics and Purchasing said on Saturday.
Any figure above 50 indicates expansion while anything below signals contraction.
The news came days after banking giant HSBC’s China PMI came in at a six-month low of 49.5.
“There is no doubt that the surging money-market rates have added uncertainty and dampened industry confidence,” said Liu Li-gang (劉利剛), chief Greater China economist at Australia & New Zealand Banking Group Ltd in Hong Kong.
The Chinese central bank will “have to strike a delicate balance” between cracking down on shadow banking and maintaining financial stability, Liu said.
A separate report released yesterday on the non-manufacturing sector also showed a deterioration, with that PMI falling to 53.4 last month from 54.6 in December last year.
RUN IT BACK: A succesful first project working with hyperscalers to design chips encouraged MediaTek to start a second project, aiming to hit stride in 2028 MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it is engaging a second hyperscaler to help design artificial intelligence (AI) accelerators used in data centers following a similar project expected to generate revenue streams soon. The first AI accelerator project is to bring in US$1 billion revenue next year and several billion US dollars more in 2027, MediaTek chief executive officer Rick Tsai (蔡力行) told a virtual investor conference yesterday. The second AI accelerator project is expected to contribute to revenue beginning in 2028, Tsai said. MediaTek yesterday raised its revenue forecast for the global AI accelerator used
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has secured three construction permits for its plan to build a state-of-the-art A14 wafer fab in Taichung, and is likely to start construction soon, the Central Taiwan Science Park Bureau said yesterday. Speaking with CNA, Wang Chun-chieh (王俊傑), deputy director general of the science park bureau, said the world’s largest contract chipmaker has received three construction permits — one to build a fab to roll out sophisticated chips, another to build a central utility plant to provide water and electricity for the facility and the other to build three office buildings. With the three permits, TSMC
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
RSS