Wed, Nov 11, 2015 - Page 14 News List

Asian shares slip to one-month lows

Reuters, TOKYO

Asian shares slipped to one-month lows yesterday as the specter of higher borrowing costs in the US and slower global economic growth haunted riskier assets.

The MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1 percent. South Korea’s KOSPI dropped 1.6 percent and Hong Kong’s Hang Seng shed 1.2 percent.

Japan’s Nikkei fell 0.3 percent from a two-and-a-half-month high hit on Monday, although it did manage to trim earlier losses.

“Share prices recovered quite a lot [last month]. The rally is coming to a end for now as markets try to price in a Fed [US Federal Reserve] rate hike in December,” said Takeru Ogihara, chief strategist at Mizuho Trust Securities in Tokyo.

Data showed China’s consumer inflation moderated more than expected last month, flagging persistent deflationary pressure in the world’s second-largest economy.

Shanghai stocks pared earlier losses and were last up 0.4 percent, led by financials that shored up last week’s rally.

Surprisingly strong US jobs data published on Friday last week dramatically changed investors’ perception on the Fed’s monetary policy track, with money market futures pricing in the likelihood of a rate hike next month at more than 70 percent.

The two-year Treasuries yield hit a five-and-a-half-year high of 0.958 percent on Friday last week and was last at 0.870 percent.

Higher US interest rates make parking funds in the US dollar more attractive than at present, especially as some of the greenback’s major rivals, such as the euro, have negative interest rates.

A consensus is forming at the European Central Bank to take the interest rate it charges banks to park money deeper into negative territory next month, four governing council members said.

Such a divergent policy outlook helped to cap the euro and lift the US dollar, although the greenback slipped slightly on Monday from profit-taking after making sharp gains on Friday last week.

The US dollar index pulled back to 99.075 from Friday’s seven-month high of 99.345.

Against the yen, the US dollar eased to ¥123.17 from a two-and-a-half-month high of 123.60 set on Monday.

The euro ticked up to US$1.0743 from Friday’s six-and-a-half-month low of US$1.0704.

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