Asian stocks fell this week as investors sold shares trading at their most expensive valuations in five years on concerns that the economy and corporate profits will take longer than expected to recover.
Hitachi Ltd, Japan’s third-largest chipmaker, tumbled 17 percent after forecasting a loss. Rio Tinto Group, the world’s third-largest mining company, slumped 14 percent after London’s Telegraph newspaper reported the company may sell shares. China Construction Bank Ltd (中國建設銀行), the world’s No. 2 lender by market value, dropped 8.8 percent as Bank of America Corp sold a stake.
“All positive news has already been priced,” said Masaru Hamasaki, a senior strategist at Toyota Asset Management Co, which oversees the equivalent of US$3.3 billion. “We need solid evidence the economy is indeed recovering to go up any further.”
The MSCI Asia-Pacific Index fell 0.7 percent to 97.28 in the past five days, ending a two-week, 9.5 percent advance. Speculation the global economy is recovering sent the gauge to the highest since Oct. 7 on Monday. The average valuation of its companies is 33 times trailing earnings, the highest level since 2004, according to data compiled by Bloomberg.
Cautious sentiment is expected to affect Taiwanese shares next week after today’s pro-independence protests against the China-friendly Chinese Nationalist Party (KMT) government, dealers said on Friday. Worries linger over a possible prolonged standoff and even violence as the Democratic Progressive Party also plans an all-night sit-in protest in front of the Presidential Office, they said.
“Political conflicts are the last thing the stock market wants to have,” Grand Cathay Securities Corp (大華證券) analyst Mars Hsu said.
Investors are also keeping a close eye on first-quarter GDP data scheduled for release on May 21, and waiting for government comments on the economic outlook for the rest of the year, they added.
The market is expected to face stiff technical barriers as it moves closer to 6,500-6,600 points next week, while ample liquidity may lend some support to prices at around 6,300, dealers said. In the week to Friday, the weighted index fell 94.78 points, or 1.44 percent, to 6,489.09 after a 9.86 percent increase the previous week.
Average daily turnover stood at NT$170.52 billion (US$5.18 billion), compared with NT$211.87 billion a week ago.
Hsu said the market’s recent significant gains have paved the way for volatility in the short term.
“Many investors may use such political factors as an excuse to cut positions for profit,” Hsu said.
Other markets on Friday:
KUALA LUMPUR: Up 0.2 percent. The Kuala Lumpur Composite Index gained 2.22 points to 1,014.21.
BANGKOK: The SET gained 7.37 points, or 1.4 percent, to 533.92.
MANILA: Up 1.97 percent. The composite index rose 44.47 points to 2,308.70.
WELLINGTON: Up 0.53 percent. The NZX-50 index rose 14.78 points to 2,790.90.
MUMBAI: Up 2.53 percent. The 30-share SENSEX gained 300.51 points to 12,173.42.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2