Sun, Oct 14, 2018 - Page 14 News List

Asia stages a comeback after US market carnage

COOLING DOWN?The US Department of the Treasury has advised Steven Mnuchin that China is not manipulating the yuan, which some traders pointed to as a positive

Bloomberg

This time, Asian stock markets are not taking their cue from the continued rout in US equities.

Shares across the region rose in afternoon trading on Friday, with markets in Hong Kong, Taiwan and South Korea gaining at least 1.9 percent. Japanese stocks reversed earlier losses, with the benchmark TOPIX index edging up 0.1 percent. US index futures also rebounded, with e-mini contracts on the S&P 500 Index jumping 1.3 percent.

The weighted index on the Taiwan Stock Exchange shrank by more than NT$1.4 trillion (US$45.29 billion) this week. Market cap fell NT$1.42 trillion, or 4.50 percent, to NT$30.18 trillion in the week after the TAIEX plunged 471.31 points, or 4.48 percent, to close at 10,045.81 points on Friday.

Some traders pointed to positive signs on the US-China trade front. The US Department of the Treasury has advised Secretary Steven Mnuchin, that China is not manipulating the yuan as the US prepares to issue a closely watched report on foreign currencies, two people familiar with the matter said.

The conclusion, if accepted by Mnuchin, would avert an escalation of the trade war.

Separately, US President Donald Trump is to meet with Chinese President Xi Jinping (習近平 ) at the G20 summit in Buenos Aires in November, the Wall Street Journal reported, citing unidentified officials in both countries.

Where Thursday was a day of across-the-board gloom in Asian equity markets, some traders are starting to see some light.

“The overnight chatter does suggest that at a minimum there will be a softer tone on the currency manipulator theme,” Stephen Innes, head of trading for Asia Pacific at Oanda Asia Pte, wrote in a note. “This does offer a significant window of opportunity for the not so meek of heart.”

The Hang Seng index ended 2.1 percent higher at 25,801.49. The China Enterprises Index also gained 2.1 percent to 10,299.09 points. The Hang Seng lost 2.9 percent for the week, its third consecutive weekly loss.

The IT sector rose 5.45 percent, supported by China’s gaming and social media giant Tencent Holdings Ltd (騰訊).

Tencent shares surged 8 percent, as the firm repurchased shares for a 22nd straight session, but still lost 5.4 percent for the week.

China’s main Shanghai Composite index closed 0.9 percent higher at 2,606.91 points, after touching near four-year lows on Thursday. The index was down 7.6 percent for the week, its worst weekly performance since early February.

Japan’s Nikkei index closed down 4.58 percent for the week at 22,694.66, while the TOPIX lost 5.03 percent to hit 1,702.45.

In South Korea the KOSPI dropped 4.66 percent for the week to 2,161.85, and in Australia the S&P/ASX200 lost 4.69 percent to 5,895.7.

Additional reporting by staff writer, with CNA and Reuters

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