Asian markets on Friday turned lower as investors took their foot off the pedal at the end of a broadly positive week, while the US dollar strengthened after the US Federal Reserve flagged more interest rate hikes down the line.
Energy firms were among the biggest losers, as oil prices fell into a bear market after dropping 20 percent from their recent highs.
The US midterms provided a much-needed fillip to equities, as traders bet that the expected gridlock on Capitol Hill would keep US President Donald Trump from pushing through measures that would likely stoke inflation and in turn rate hikes.
Rising US borrowing costs have been one of the major issues weighing on global equities this year.
However, after its latest policy meeting on Thursday, the Fed said that it expected “further gradual increases” in the key interest rate as the economy goes from strength to strength.
Growth “has been rising at a strong rate,” jobs were picking up, unemployment dropping and household spending “growing strongly,” the central bank said.
While it did not lift rates, observers said another move upward next month was very likely.
US markets closed mostly lower on Thursday, with Asian equities following suit on Friday.
In Taipei, foreign institutional investors on Friday sold a net NT$6.84 billion (US$222 million) of shares on the main board, sending the TAIEX down 115.30 points, or 1.16 percent, to 9,830.01. That was a decrease of 0.8 percent from a close of 9,906.59 on Nov. 2.
In Tokyo, the Nikkei 225 on Friday fell 237.00 points, or 1.1 percent, to 22,253.00, only slightly up from 22,243.66 a week earlier.
In Seoul, the KOSPI on Friday slid 6.54 points, or 0.3 percent, to 2,086.09, sinking 0.5 percent from a close of 2,096.00 on Nov. 2
Hong Kong’s Hang Seng on Friday dropped 625.80 points, or 2.4 percent, to 25,601.92 — a loss of 3.3 percent from a close of 26,486.35 on Nov. 2 — and the Shanghai Composite shed 36.76 points, or 1.4 percent, to close at 2,598.87 — a drop of 2.9 percent from 2,676.48 a week earlier — after data showed another drop in Chinese factory prices, while tech firms were hit by a series of weak earnings results from Chinese firms.
“China producer’s inflation is cooling as manufacturing activity is receding, damping price pressures on raw commodities, yet another casualty of US-China trade wars,” Oanda Corp head of Asia-Pacific trade Stephen Innes said. “The decline in the PPI [producer price index] underscores increased economic pressures.”
Sydney eased 0.1 percent, Singapore sank 0.6 percent and Jakarta was down more than 1 percent.
The US dollar, which turned lower after the election results, picked up against most other currencies in New York and continued that trend in Asia, with emerging-market and other higher-yielding units sharply lower.
“There is a sense that for now US-related incentives have all come out, but, of course, the US-China summit talks at the end of the month require attention,” Mizuho Securities Co Ltd said in a note.
“We expect the market’s attention for this month will go to Europe,” with the region’s overall growth, Italian fiscal conditions and Brexit talks in focus, Mizuho said.
Energy firms were deep in negative territory after another sharp sell-off in oil on Thursday, which came on the back of data showing a surge in US stockpiles.
Crude has taken a battering since hitting four-year highs last month, as rising production, the brewing China-US trade war and easing concerns about the impact of sanctions on Iran.
“Certainly, the waivers on US sanctions for Iranian crude have really accelerated the decline from last month and sensitivity to those issues have been high in recent times,” Australia and New Zealand Banking Group Ltd senior strategist Daniel Hynes said.
The increases in US stockpiles “add to rising concerns of output,” he said, adding that traders would be following a weekend meeting between OPEC and Russia.
Among the worst-hit energy firms was China National Offshore Oil Corp (中國海洋石油), which lost 4 percent in Hong Kong, while Tokyo-listed Inpex Corp sank 3.9 percent and Australia’s Woodside Petroleum dropped 1.3 percent.
Additional reporting by staff writer
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the