Sun, Jan 18, 2015 - Page 15 News List

Asian markets reeling from Switzerland currency shock

Bloomberg

Asian stocks fell and equity volatility across the region increased this week, as the Switzerland’s unexpected lifting of its currency cap spurred a flight to haven assets.

Chugai Pharmaceutical Co, which relies on imports from Switzerland, lost 2.5 percent in Tokyo, while in Seoul, Samsung C&T Corp tumbled 6.3 percent amid concern over slowing overseas orders at South Korean builders.

The MSCI Asia Pacific Index declined 0.6 percent to 137.98 as of 7:12pm on Friday in Hong Kong, paring its weekly advance to 0.1 percent. Financial shares were the largest contributors to losses.

The Swiss National Bank (SNB) surprised markets on Thursday by abolishing a minimum exchange rate against the euro designed to shield Switzerland’s economy from the region’s sovereign debt crisis.

“The SNB caught almost everyone by surprise and it’s creating unease and anxiety in markets,” Nader Naeimi of AMP Capital Investors said by telephone.

In Taipei, the TAIEX slipped 0.29 percent, or 26.80 points, to 9,138.29, compared with 9,215.58 on Jan. 9.

On Friday, Taiwan Semiconductor Manufacturing Co (台積電) rose 4.18 percent to NT$137, while Acer Inc (宏碁) fell 0.49 percent to NT$20.25.

Japan’s TOPIX fell 0.9 percent, capping a third weekly drop, as the yen touched a one-month high. The equity gauge slid as much as 2.4 percent before paring losses as the currency gave up some of Thursday’s 1 percent gain. The Nikkei Stock Average Volatility Index jumped 8.4 percent.

Hong Kong’s Hang Seng Index retreated 1 percent as a gauge of price swings rose 3.4 percent, as the Hang Seng China Enterprises Index of Chinese firms slid 0.9 percent.

Bucking the trend, the Shanghai Composite Index rose 1.2 percent on Friday.

The gauge advanced 2.8 percent this week amid optimism that the People’s Bank of China will cut reserve-requirement ratios after unexpectedly lowering borrowing costs in November last year to bolster the economy. The index’s 10th week of gains is its longest winning streak since May 2007.

Meanwhile, Australia’s S&P/ASX 200 Index slipped 0.6 percent, South Korea’s KOSPI retreated 1.4 percent, New Zealand’s NZX 50 Index declined 0.5 percent, India’s BSE S&P Sensex Index added 0.2 percent and Singapore’s Straits Times Index slid 1.1 percent.

In other markets on Friday:

Wellington fell 0.45 percent, or 25.33 points, from Thursday to end on 5,616.73.

Manila was closed for a public holiday.

Additional reporting by AFP

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