Sun, Dec 23, 2018 - Page 14 News List

Fresh losses add to Asia’s rough week

CHINESE COLLAPSE:The Shanghai Composite fell 3 percent for the week, capping a tough year for Chinese equities, which have lost nearly US$3 trillion since January

AFP and Reuters, HONG KONG

Fresh political turbulence in Washington and renewed fears over US-China relations pushed Asian markets lower on Friday, as a global slump sparked by unease over US Federal Reserve policy showed no signs of easing.

The resignation of US Secretary of Defense James Mattis — seen as a moderating force on an often impulsive president — and the looming threat of a US federal government shutdown alarmed investors as concern grows over weakening global growth.

Shares turned sharply lower after US President Donald Trump hardened his demand that the US Congress fund a US-Mexico border wall, plunging Washington into chaos and leaving the US government on the verge of a Christmas shutdown with less than 24 hours before a deadline at midnight on Friday to reach agreement.

Rising tensions between the world’s two largest economies also unnerved markets, with China hitting back at Washington after the US Department of Justice indicted two alleged Chinese hackers accused of having ties to Beijing’s security services.

US officials said the indictment showed that Chinese President Xi Jinping (習近平) had not fulfilled his pledge to stop cybercrime, but it drew a furious response from Beijing, which accused Washington of “fabricating facts.”

The row erupted as the two sides are preparing for talks next month to resolve their trade conflict.

“A potential US government shutdown and US accusations of Chinese hacking fueled existing market concerns about economic growth,” CMC Markets and Stockbroking chief market strategist Michael McCarthy said.

Japanese stocks again bore the brunt of Asian losses, with Tokyo falling further into bear market territory to hit a fresh 15-month low and regional shares on course for the worst week since October.

The Nikkei 225 on Friday fell 226.39 points, or 1.1 percent, to 20,166.19, plummeting 6.2 percent from a close of 21,506.88 on Dec. 14.

Nissan Motor Co Ltd slipped 2.04 percent after former chairman Carlos Ghosn faced a fresh criminal allegation that could keep him in jail well into next year.

In Taipei, the TAIEX yesterday closed down 30.51 points, or 0.32 percent, at 9,646.16, down 1.3 percent from 9,774.16 on Dec. 14. Turnover totaled NT$38.3 billion (US$1.24 billion).

The Shanghai Composite on Friday fell 20.02 points, or 0.8 percent, to 2,516.25, dropping 3 percent from a close of 2,593.74 a week earlier. That capped a difficult year for Chinese equities, with nearly US$3 trillion wiped off the value of the country’s stock market since the end of January.

However, Hong Kong’s Hang Seng on Friday rose 129.89 points, or 0.5 percent, to 25,753.42, buoyed by tech giant Tencent Holdings Ltd (騰訊), but finished down 1.3 percent for the week.

A subindex tracking energy shares dipped 1.1 percent, while the information technology sector rose 3.44 percent, the financial sector ended 0.61 percent higher and the property sector dipped 1.08 percent

Shares of Chinese game developers rallied after media reports of regulatory approvals for some games. Index heavyweight Tencent added 4.5 percent.

About 2 billion shares were traded on the Hang Seng, about 126 percent of the market’s 30-day moving average of 1.58 billion shares per day.

The US dollar struggled as investors shunned risk, wallowing near ¥111 and adding to downward pressure on the Nikkei.

“The dollar is expected to continue facing downside pressure against major currencies,” MUFG Bank Ltd head of Tokyo global markets research Minori Uchida said.

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