Sun, Nov 11, 2018 page14

• Asia markets fall after healthy week

  • AFP, HONG KONG
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  Asian markets on Friday turned lower as investors took their foot off the pedal at the end of a broadly positive week, while the US dollar strengthened after the US Federal Reserve flagged more interest rate hikes down the line.

  Energy firms were among the biggest losers, as oil prices fell into a bear market after dropping 20 percent from their recent highs.

  The US midterms provided a much-needed fillip to equities, as traders bet that the expected gridlock on Capitol Hill would keep US President Donald Trump from pushing through measures that would likely stoke inflation and in turn rate hikes.

  Rising US borrowing costs have been one of the major issues weighing on global equities this year.

  However, after its latest policy meeting on Thursday, the Fed said that it expected “further gradual increases” in the key interest rate as the economy goes from strength to strength.

  Growth “has been rising at a strong rate,” jobs were picking up, unemployment dropping and household spending “growing strongly,” the central bank said.

  While it did not lift rates, observers said another move upward next month was very likely.

  US markets closed mostly lower on Thursday, with Asian equities following suit on Friday.

  In Taipei, foreign institutional investors on Friday sold a net NT$6.84 billion (US$222 million) of shares on the main board, sending the TAIEX down 115.30 points, or 1.16 percent, to 9,830.01. That was a decrease of 0.8 percent from a close of 9,906.59 on Nov. 2.

  In Tokyo, the Nikkei 225 on Friday fell 237.00 points, or 1.1 percent, to 22,253.00, only slightly up from 22,243.66 a week earlier.

  In Seoul, the KOSPI on Friday slid 6.54 points, or 0.3 percent, to 2,086.09, sinking 0.5 percent from a close of 2,096.00 on Nov. 2

  Hong Kong’s Hang Seng on Friday dropped 625.80 points, or 2.4 percent, to 25,601.92 — a loss of 3.3 percent from a close of 26,486.35 on Nov. 2 — and the Shanghai Composite shed 36.76 points, or 1.4 percent, to close at 2,598.87 — a drop of 2.9 percent from 2,676.48 a week earlier — after data showed another drop in Chinese factory prices, while tech firms were hit by a series of weak earnings results from Chinese firms.

  “China producer’s inflation is cooling as manufacturing activity is receding, damping price pressures on raw commodities, yet another casualty of US-China trade wars,” Oanda Corp head of Asia-Pacific trade Stephen Innes said. “The decline in the PPI [producer price index] underscores increased economic pressures.”

  Sydney eased 0.1 percent, Singapore sank 0.6 percent and Jakarta was down more than 1 percent.

  The US dollar, which turned lower after the election results, picked up against most other currencies in New York and continued that trend in Asia, with emerging-market and other higher-yielding units sharply lower.

  “There is a sense that for now US-related incentives have all come out, but, of course, the US-China summit talks at the end of the month require attention,” Mizuho Securities Co Ltd said in a note.

  “We expect the market’s attention for this month will go to Europe,” with the region’s overall growth, Italian fiscal conditions and Brexit talks in focus, Mizuho said.

  Energy firms were deep in negative territory after another sharp sell-off in oil on Thursday, which came on the back of data showing a surge in US stockpiles.

  Crude has taken a battering since hitting four-year highs last month, as rising production, the brewing China-US trade war and easing concerns about the impact of sanctions on Iran.

  “Certainly, the waivers on US sanctions for Iranian crude have really accelerated the decline from last month and sensitivity to those issues have been high in recent times,” Australia and New Zealand Banking Group Ltd senior strategist Daniel Hynes said.

  The increases in US stockpiles “add to rising concerns of output,” he said, adding that traders would be following a weekend meeting between OPEC and Russia.

  Among the worst-hit energy firms was China National Offshore Oil Corp (中國海洋石油), which lost 4 percent in Hong Kong, while Tokyo-listed Inpex Corp sank 3.9 percent and Australia’s Woodside Petroleum dropped 1.3 percent.

  Additional reporting by staff writer
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