Asia’s benchmark stock index fell the past five days to its biggest two-week loss since June, as Chinese shares traded in Hong Kong entered a bear market and the US Federal Reserve gave a timetable for raising interest rates.
Uni-President China Holdings Ltd (統一企業中國控股) slumped 16 percent in Hong Kong, leading the weekly drop on Asia’s regional gauge, after the instant-noodle maker’s profit last year missed analyst projections. Newcrest Mining Ltd, Australia’s No. 1 gold producer, plunged 13 percent after bullion dropped this week for the first time since January.
In Taipei, the TAIEX closed 1.3 percent lower at 8,577.17 this week amid concern over protests against a service trade agreement with China.
Stocks opened higher on Friday, but selling emerged quickly, pushing the index down into negative territory as investors rushed to lock in gains amid fears of further losses as protesters continued to occupy the Legislative Yuan to oppose the trade pact.
“Many investors were afraid that if protests against the trade agreement with China are prolonged, the local bourse’s downturn could be extended. For the moment, they are just trying to keep as much cash as possible,” President Securities Corp (統一證券) analyst Vickie Hsieh (謝雯霞) said.
On Tuesday night, protesters stormed the legislature and began occupying the legislative chamber, demanding that lawmakers review the trade agreement with China item by item before voting on it, and calling for direct dialogue with President Ma Ying-jeou (馬英九).
The occupation was continuing at press time.
The MSCI Asia Pacific Index fell 1.2 percent this week to 132.77, bringing its two-week drop to 4.6 percent. Information technology shares and utilities led declines. Data this week showed Japan’s trade deficit exceeded estimates last month and growth in China’s new-home prices slowed last month.
The regional measure’s 6.1 percent decline this year pushed valuations on the gauge to 12.5 times estimated earnings. That compares with a multiple of about 15.9 for the Standard & Poor’s 500 Index and 14.4 for the STOXX Europe 600 Index.
“China’s latest figures have been disappointing, people are worried about the interest-rate hike in the US, and they are also revising their outlook on Abenomics in Japan,” said Benjamin Tam, a Hong Kong-based portfolio manager at IG Investment Ltd. “Markets will remain weak in the near term.”
The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong entered a so-called bear market on Thursday, after slipping 20 percent from its Dec. 2 high, amid deepening concern the world’s No. 2 economy is slowing.
The measure rebounded on Friday to post a 1.4 percent gain for the week, while Hong Kong’s benchmark Hang Seng Index slid 0.5 percent. China’s Shanghai Composite Index added 2.2 percent.
Japan’s TOPIX slid 1.6 percent for the week, which was shortened by a holiday on Friday. The Nikkei 225 Stock Average retreated 0.7 percent, with Tokyo Electric Power Co and Denso Corp leading declines, falling 8.5 percent and 7.9 percent respectively.
South Korea’s KOSPI fell 2.8 percent, while New Zealand’s NZX 50 Index added 0.9 percent. Australia’s S&P/ASX 200 Index advanced 0.2 percent and Singapore’s Straits Times Index rose 0.3 percent.
US Fed Chair Janet Yellen said the US central bank’s stimulus program may end this fall, with benchmark interest rates rising six months later. The Fed said on Wednesday its key rate, currently near zero, would be 1 percent by the end of next year and 2.25 percent a year later.
In other markets on Friday:
Manila shed 1.22 percent, or 78.09 points, from Thursday to 6,339.26.
Mumbai edged up 13.66 points from Thursday to close at 21,753.75.
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
Gold surged to a fresh record on Friday, fueled by US dollar weakness and low interest rates, while silver headed for its best month since 1979. Spot bullion is up more than 10 percent this month, as US real yields lingered near record lows. While the ferocity of rallies in gold and silver cooled in the middle of the week, most market watchers predict there might be more gains ahead. Both metals have added about 30 percent this year, with gold and silver exchange-traded funds boosting holdings to a record, as concern about the fallout from the COVID-19 pandemic fuels demand for
MOVING FROM CHINA? The article did not name the company, but Foxconn, Wistron and Pegatron were among firms chosen for a production-linked incentive plan in India An Apple Inc vendor is looking at shifting six production lines to India from China, which could result in US$5 billion of iPhone exports from the South Asian nation, the Times of India reported, citing people familiar with the matter who it did not identify. The establishment of the facility would create about 55,000 jobs over about a year, the newspaper reported, not naming the Apple vendor. It would also cater to the domestic market and expand operations to include tablets and laptops, the newspaper reported. Samsung Electronics Co and Apple’s assembly partners are among 22 companies that have pledged 110 billion
MediaTek Inc (聯發科) has hired a former US Department of Commerce official to help it navigate worsening US-China tensions that have already ensnared its customer Huawei Technologies Co (華為). Patrick Wilson, who most recently served as director of the department’s Office of Business Liaison, has been appointed vice president of government affairs at MediaTek USA to lead its public policy initiatives, the chip designer said in a draft press statement seen by Bloomberg News. Wilson previously worked at the Semiconductor Industry Association, where he led the trade group’s dealings with the US federal government. Technology companies with ties to or operations in China