Asian stocks fell on Friday, erasing earlier gains and sending the regional gauge toward its biggest weekly decline in a month, as shares in Taiwan and Hong Kong plunged.
The MSCI Asia Pacific Index dipped 0.2 percent to 139.12 in Hong Kong, reversing an advance of as much as 0.4 percent. The measure is down 0.6 percent this week, the most since the period ended July 8.
“The market lacks momentum,” said Margaret Yang (楊燕), an analyst at CMC Markets in Singapore. “The market has been driven by liquidity arising from loose monetary policies by central banks around the world, rather than improving economic fundamentals. Besides the rally in oil, there’s nothing that could push share prices higher.”
Asian stocks have rallied 23 percent from a February low through Thursday, with the regional benchmark index touching a one-year high last week, as lackluster data from the world’s biggest economies fueled speculation central banks would continue to support them with stimulus and loose monetary policy.
The Fed minutes released on Wednesday showed officials saw little risk of a sharp uptick in inflation, helping drive the odds of a rate increase this year back below 50 percent.
In Taipei, the TAIEX moved lower to close below the 9,100-point mark on Friday amid concerns over foreign fund outflows from the region as investors took their cues from the New Taiwan dollar’s plunge against the greenback, dealers said.
Selling focused on large-cap stocks almost across the board, led by electronics and financial shares, while cement stocks appeared resilient amid optimism over sales during the current peak season, they said.
The TAIEX ended down 0.97 percent at the day’s low of 9,034.27. It was the first time the index closed below the 9,100-point mark since Aug. 5, when it ended at 9,092.12 points. The benchmark index fell 1.3 percent from 9,150.39 on Friday last week.
“The losses suffered by the Taiwan dollar prompted many investors to think foreign investors have started to move funds out of the country,” KGI Securities analyst (凱基證券) Phil Chu said. “There are rising fears that the party in the local equity market will end soon in the event of further foreign fund expatriation.”
Chu said that the selling in large-cap stocks was likely to come after foreign institutional investors locked in the gains they had built in recent sessions.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$3.85 billion worth of shares on Friday.
Among the falling large-cap financial stocks, Cathay Financial Holding Co (國泰金) fell 1.5 percent to NT$37.50, Fubon Financial Holding Co (富邦金) lost 1.6 percent to end at NT$41.20 and CTBC Financial Holding Co (中信金) closed down 1.8 percent at NT$18.90.
Bucking the downturn in the broader market, the cement sector rose 3.3 percent on hopes of peak season effects in the second half of this year. Taiwan Cement Corp (台泥) rose 4.7 percent to NT$36.75 and Asia Cement Corp (亞泥) gained 2.71 percent to end at NT$30.30.
Japanese shares fell 2.1 percent for the week as the yen reached the strongest level since November 2013. Authorities are watching closely for speculative moves in the exchange rate because it has been volatile, Japanese Vice Minister of Finance Masatsugu Asakawa said on Thursday.
“The BOJ [Bank of Japan] is really in a tough spot,” said James Woods, a strategist at Rivkin Securities in Sydney. “They’re fighting an uphill battle against the market given the strengthening yen. That’s creating a lot of headwinds for Japanese exporters.”
The Hang Seng Index slipped 0.4 percent, retreating from a nine-month high, as casino shares slumped. Sands China Ltd (金沙中國) and Swire Pacific Ltd slumped after analysts downgraded their shares. The Shanghai Composite Index added 0.1 percent on Friday.
Elsewhere in the region, the Jakarta Composite Index slipped 0.7 percent and the Philippine Stock Exchange Index lost 0.3 percent. India’s S&P BSE SENSEX declined 0.2 percent, while South Korea’s KOSPI closed little changed. Australia’s S&P/ASX 200 Index gained 0.3 percent and New Zealand’s S&P/NZX 50 Index rose 0.3 percent to a record.
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