Asian stocks fell this week, posting the longest streak of weekly losses in more than 18 months amid concern growth is slowing in China, the world’s second-largest economy.
CNOOC Ltd (中國海洋石油) slumped 8.7 percent in Hong Kong after an output growth forecast from China’s biggest offshore oil and gas producer fell short of its five-year average target. Industrial & Commercial Bank of China Ltd (中國工商銀行) fell 2.5 percent as investors in a troubled trust product distributed by the lender met officials, demanding their money amid concern of a default. Newcrest Mining Ltd, a gold producer, climbed 3.2 percent in Sydney as the precious metal capped a fifth week of gains.
The MSCI Asia Pacific Index slid 1.4 percent to 137.64 this week. The gauge fell a fourth straight week as a preliminary survey from HSBC Holdings and Markit Economics indicated Chinese factory output would shrink this month. The measure’s 5.1 percent advance from the end of August pushed valuations on the gauge to 13 times estimated earnings, above the average multiple during the past three years.
“There will be a correction of 10 percent or more,” Monty Guild, chief investment officer of Los Angeles-based Guild Investment Management Inc, said by e-mail about stocks globally. “We see China as an unattractive place to invest.”
Japan’s TOPIX fell 2.5 percent this week and the Nikkei 225 Stock Average declined 2.2 percent as the yen strengthened against the US dollar. South Korea’s KOSPI lost 2.4 percent, Singapore’s Straits Times Index slid 2.3 percent and New Zealand’s NZX 50 Index declined 0.4 percent.
Taiwan’s TAIEX was little changed this week at 8,598.31, with reduced turnover on Friday as investors retreated from the trading floor ahead of the Lunar New Year holiday, dealers said.
Equity markets will be closed from Tuesday to Feb. 4.
Buying in select large-cap electronics stocks, such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Hon Hai Precision Industry Co (鴻海精密), on Friday helped offset the impact from the losses posted on Wall Street overnight, while the construction sector faced relatively heavy selling due to a new government measure that aims to cap luxury home prices, dealers said.
In the construction sector, which closed down 0.74 percent, Farglory Land Development Co (遠雄建設) lost 1.52 percent to close at NT$48.50 and Chong Hong Construction Co (長虹建設) was down 1.81 percent at NT$81.60.
Meanwhile, Australia’s S&P/ASX 200 Index retreated 1.2 percent on the week, while Hong Kong’s Hang Seng Index slid 2.95 percent and the Hang Seng China Enterprises Index, known as the H-share gauge of mainland Chinese firms listed in the territory, slipped 1.5 percent.
In other markets on Friday:
Mumbai fell 1.12 percent, or 240.1 points, from Thursday to 21,133.56.
Manila rose 0.35 percent, or 21.45 points, to 6,191.50.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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