Asia’s benchmark stock index fell the past five days to its biggest two-week loss since June, as Chinese shares traded in Hong Kong entered a bear market and the US Federal Reserve gave a timetable for raising interest rates.
Uni-President China Holdings Ltd (統一企業中國控股) slumped 16 percent in Hong Kong, leading the weekly drop on Asia’s regional gauge, after the instant-noodle maker’s profit last year missed analyst projections. Newcrest Mining Ltd, Australia’s No. 1 gold producer, plunged 13 percent after bullion dropped this week for the first time since January.
In Taipei, the TAIEX closed 1.3 percent lower at 8,577.17 this week amid concern over protests against a service trade agreement with China.
Stocks opened higher on Friday, but selling emerged quickly, pushing the index down into negative territory as investors rushed to lock in gains amid fears of further losses as protesters continued to occupy the Legislative Yuan to oppose the trade pact.
“Many investors were afraid that if protests against the trade agreement with China are prolonged, the local bourse’s downturn could be extended. For the moment, they are just trying to keep as much cash as possible,” President Securities Corp (統一證券) analyst Vickie Hsieh (謝雯霞) said.
On Tuesday night, protesters stormed the legislature and began occupying the legislative chamber, demanding that lawmakers review the trade agreement with China item by item before voting on it, and calling for direct dialogue with President Ma Ying-jeou (馬英九).
The occupation was continuing at press time.
The MSCI Asia Pacific Index fell 1.2 percent this week to 132.77, bringing its two-week drop to 4.6 percent. Information technology shares and utilities led declines. Data this week showed Japan’s trade deficit exceeded estimates last month and growth in China’s new-home prices slowed last month.
The regional measure’s 6.1 percent decline this year pushed valuations on the gauge to 12.5 times estimated earnings. That compares with a multiple of about 15.9 for the Standard & Poor’s 500 Index and 14.4 for the STOXX Europe 600 Index.
“China’s latest figures have been disappointing, people are worried about the interest-rate hike in the US, and they are also revising their outlook on Abenomics in Japan,” said Benjamin Tam, a Hong Kong-based portfolio manager at IG Investment Ltd. “Markets will remain weak in the near term.”
The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong entered a so-called bear market on Thursday, after slipping 20 percent from its Dec. 2 high, amid deepening concern the world’s No. 2 economy is slowing.
The measure rebounded on Friday to post a 1.4 percent gain for the week, while Hong Kong’s benchmark Hang Seng Index slid 0.5 percent. China’s Shanghai Composite Index added 2.2 percent.
Japan’s TOPIX slid 1.6 percent for the week, which was shortened by a holiday on Friday. The Nikkei 225 Stock Average retreated 0.7 percent, with Tokyo Electric Power Co and Denso Corp leading declines, falling 8.5 percent and 7.9 percent respectively.
South Korea’s KOSPI fell 2.8 percent, while New Zealand’s NZX 50 Index added 0.9 percent. Australia’s S&P/ASX 200 Index advanced 0.2 percent and Singapore’s Straits Times Index rose 0.3 percent.
US Fed Chair Janet Yellen said the US central bank’s stimulus program may end this fall, with benchmark interest rates rising six months later. The Fed said on Wednesday its key rate, currently near zero, would be 1 percent by the end of next year and 2.25 percent a year later.
In other markets on Friday:
Manila shed 1.22 percent, or 78.09 points, from Thursday to 6,339.26.
Mumbai edged up 13.66 points from Thursday to close at 21,753.75.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
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