Sun, Jul 31, 2016 - Page 14 News List

Asian stock markets outside Japan retreat

Bloomberg and staff writer, with CNA

Asian markets outside Japan on Friday slid from the highest level in almost a year as commodity producers tumbled amid declines in crude oil. Financial shares rallied in Tokyo after the Bank of Japan (BOJ) expanded exchange-traded fund purchases and kept its policy interest rate unchanged.

The MSCI Asia Pacific Excluding Japan Index fell 0.7 percent to 435.59 as of 4:12pm in Hong Kong, trimming this month’s advance to 5.1 percent.

After a wild ride for investors, the TOPIX ended 1.2 percent higher, having changed direction at least 10 times, while the yen rose 1.4 percent. The Bank of Japan refrained from expanding the government bond purchases that have been the mainstay of its unprecedented monetary stimulus, opting instead to almost double the buying of ETFs.

“The market is probably holding judgement of the BOJ announcement today until the fiscal stimulus is announced,” Shane Oliver, Sydney-based global investment strategist at AMP Capital Investors Ltd, which manages more than US$110 billion, said by telephone. “Perhaps the BOJ wants more help from the government in terms of the stimulus and they’re not prepared to do anything in advance to that.”

The BOJ was widely expected to add to easing at the end of its two-day meeting, with 32 of 41 analysts in a Bloomberg survey forecasting the central bank would expand its record stimulus program.

Japanese Prime Minister Shinzo Abe’s government added pressure on Wednesday as Kyodo News cited him as saying a fiscal stimulus package of more than ¥28 trillion (US$267 billion) would be compiled next week.

In an unexpected development, BOJ Governor Haruhiko Kuroda has ordered an assessment of the effectiveness of BOJ policy, to be undertaken at the next meeting, which is scheduled for September.

The TAIEX moved lower and closed below the 9,000-point mark on Friday as investors rushed to cut their holdings in large-cap stocks in both the electronics and non-high- tech sectors by locking in gains they had built up in recent sessions, dealers said.

Selling in the late trading session escalated, pushing down Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock in the local market, to lead the downturn in the broader market as foreign institutional investors shifted to the sell side, the dealers said.

The TAIEX closed down 92.23 points, or 1.02 percent, at the day’s low of 8,984.41, off an early high of 9,071.51, and down from 9,013.14 on Friday last week.

It was the first time the index had closed below 9,000 points since July 15, when the local main board ended at 8,949.85 points.

The Hang Seng China Enterprises Index of mainland Chinese companies traded in Hong Kong slid 1.4 percent. The Shanghai Composite Index slipped 0.5 percent, paring this month’s gain to 1.7 percent. The advance for July was the biggest since March as concern about a weaker yuan faded and data added to evidence of a stabilizing economy.

Singapore’s Straits Times Index fell 1.5 percent, set for its biggest decline in a month. DBS Group Holdings Ltd, Southeast Asia’s biggest lender, slumped by most since August last year, after saying it expects to recover half of its S$700 million (US$518 million) exposure to Swiber Holdings Ltd, a Singapore-listed offshore oil and gas services group that filed for liquidation on Wednesday.

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