Tue, Mar 04, 2014 - Page 13 News List

Shares down as regional markets react to Ukraine

JITTERBUGS:Ukraine’s tensions and weak Chinese manufacturing figures have created a domino effect of falling shares, turning financial markets risk-averse

Staff writer, with agencies

Shares pulled back yesterday in line with most stock markets around the region, as investors were left jittery by the tense situation in the Ukraine, dealers said.

The TAIEX closed down 37.06 points, or 0.44 percent, at 8,601.98 on a turnover of NT$99.44 billion (US$3.28 billion), after moving between 8,545.24 and 8,628.05.

The New Taiwan dollar also weakened 0.1 percent to NT$30.369 against its US counterpart yesterday.

The downbeat atmosphere was compounded in some markets by another disappointing set of manufacturing figures from China, which added to concerns about growth in the world’s No. 2 economy.

Tokyo shed 1.27 percent, or 188.84 points, to 14,652.23, Sydney fell 0.38 percent, or 20.5 points, to 5,384.3 and Seoul lost 0.77 percent, or 15.30 points, to end at 1,964.69.

Hong Kong tumbled 1.47 percent, or 336.29 points to 22,500.67.

However, Shanghai rose 0.92 percent, or 18.93 points, to 2,075.23 as investors brushed off the weak manufacturing figures ahead of Beijing’s annual policy meeting later this week.

The annual National People’s Congress opens tomorrow — the first meeting under the leadership of Chinese President Xi Jinping (習近平) — with investors hoping for fresh economic policies as growth shows signs of slowing.

“The market is likely to rise moderately in coming sessions, given expectations that China will release more market-friendly policies ... at the upcoming annual gathering of the country’s legislature,” CEBM Group analyst Li Wenjie (李文杰) said.

Yuanta Securities Investment Consulting (元大投顧) vice president Cheng Tsung-chi (鄭宗祺) said Taiwan’s market underwent a correction because of the heightened tensions created by Russia’s actions in the Crimea over the weekend.

However, Cheng said that local shares were likely to see a consolidation even without the developments in Ukraine after closing at a 30-month high of 8,639.58 on Thursday last week.

Taiwan’s five-year bonds climbed, snapping a three-day drop, as investors sought the relative safety of government debt amid the evolving crisis in Ukraine.

The yield on the 1 percent sovereign notes due in February 2019 dropped one basis point, or 0.01 percentage point, to 1.0969 percent, prices from GRETAI Securities Market show.

Analysts said financial markets worldwide have turned risk-averse.

Chief beneficiaries of the flight from risk were gold, German benchmark debt and the yen, as well as other currencies perceived as safe havens in times of heightened volatility, while oil was supported by the demand outlook, they said.

Spot gold hit a four-month intraday high of US$1,350 an ounce and the US dollar hit a near one-month low against the yen and approached Friday’s two-year low against the Swiss franc before pulling off their respective highs and lows.

The euro shed 0.2 percent against the US dollar to US$1.3778, slipping from Friday’s two-month high.

“It’s a reaction to the escalation in tension in Ukraine over the weekend ... the traditional risk proxies are getting hit, and the safe havens are getting bid,” ANZ currency strategist Sam Tuck in Auckland said.

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