Sun, Feb 21, 2016 - Page 15 News List

Rising yen puts a damper on Asian markets’ advance

Bloomberg and staff writer, with CNA

Asian stocks fell on Friday, paring the biggest weekly rally since December 2011, as the yen strengthened and a buildup in oil supplies dragged crude prices and energy producers lower.

The MSCI Asia Pacific Index declined 0.7 percent to 119.49 as of 1:02pm in London. The gauge rose 5.8 percent this week after sinking to a three-and-a-half-year low last week. Speculation that the global selloff had gone too far and that central banks would take steps to bolster markets lifted shares early in the week. That optimism faded as concerns over moves in crude and the yen resurfaced.

“Sentiment on the oil market has been a key macro driver for stock-market sentiment recently,” said Ric Spooner, Sydney-based chief market analyst at CMC Markets. “Concerns about the potential for credit-market problems in the event of a lower-for-longer oil scenario are near the top of a fairly long list of macro factors worrying investors at the moment.”

Even after this week’s gains, the MSCI Asia Pacific Index has lost 9.4 percent this year. Since the start of January, a combination of tumbling oil prices, concern about the slowdown in Asia’s largest economy and a selloff in bank stocks sent a measure of global stocks into a bear market for the first time in five years.

Japan’s TOPIX declined 1.5 percent after the yen rose on Thursday. A strengthening currency dents the earnings outlook for exporters. Even with Friday’s losses, the benchmark gauge finished the week with a gain of 8 percent, the most since 2009, amid optimism the Bank of Japan will come forth with more monetary stimulus.

South Korea’s KOSPI added 0.4 percent. The won touched a five-and-a-half-year low against the greenback before paring its fall as the central bank and Ministry of Finance said recent moves had been excessive and they would take measures to combat “herd behavior” in the foreign-exchange market.

Taiwan’s TAIEX closed slightly higher on Friday, as buying emerged late in the session, helping the market to recoup its earlier losses and end in positive territory, dealers said.

The buying was focused on select large-cap electronics and financial stocks, but interest also rotated to renewable energy stocks like solar energy companies on hopes that president-elect Tsai Ing-wen (蔡英文) would introduce measures to lift the sector after she takes office on May 20, dealers said.

The TAIEX closed 0.l2 percent higher on Friday at 8,325.04. It also chalked up a gain of 262.04 points, or 3.25 percent, from Feb. 3, the last trading day before the 10-day Lunar New Year break.

Hong Kong’s Hang Seng Index lost 0.4 percent and the Hang Seng China Enterprises Index declined 0.7 percent. Casino operators fell after MGM Resorts International posted a surprise fourth-quarter loss. MGM China Holdings Ltd (美高梅中國控股), the company’s Hong Kong-listed unit, sank 7.8 percent, while Sands China Ltd (金沙中國) fell 3.1 percent to lead losses on the Hang Seng measure.

The Shanghai Composite Index slid 0.1 percent. China’s central bank will boost the amount of reserves that must be locked away by some banks that recently increased lending too quickly, people familiar with the matter said. Regional banks are among those lenders affected by the increase, said the people, who asked not to be identified because the move was not made public.

New Zealand’s S&P/NZX 50 Index rose 0.5 percent. Australia’s S&P/ASX 200 Index fell 0.8 percent and Singapore’s Straits Times Index was little changed.

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