Shares slipped in Asia on Friday after benchmarks on Wall Street had their biggest drop in four weeks as investors registered disappointment over an inflation reading that came in hotter than expected.
Oil prices and US futures also declined after the S&P 500 fell 1.4 percent on Thursday following news that inflation at the wholesale level slowed by less than economists had forecast.
It echoed a report on prices at the consumer level from earlier in the week that suggested inflation was not cooling as quickly and as smoothly as hoped.
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Stocks have swung between gains and losses recently on worries that persistently high inflation would push the US Federal Reserve to get even more aggressive on interest rates. Higher rates can drive down inflation, but also drag on investment prices and raise the risk of a serious recession.
“Continued strength in the inflation data suggests the Fed’s work is still not finished, and risks of a longer cycle are rising,” SPI Asset Management managing partner Stephen Innes said in a report.
Taiwan’s TAIEX fell 0.46 percent to close at 15,479.7 on turnover of NT$210.095 billion (US$6.91 billion). It was down 0.69 percent from the previous week.
Tokyo’s Nikkei 225 fell 0.66 percent to 27,513.13, down 0.57 percent for the week, while the broader TOPIX lost 0.46 percent to 1,991.93, but gained 0.25 percent from the previous week.
South Korea’s sank 0.98 percent to 2,451.21, down 0.75 percent from the previous week, while Hong Kong’s Hang Seng lost 2.28 percent to close at 20,719.81, down 2.22 percent from the previous week.
Shares in one of China’s top investment banks, China Renaissance Holdings Ltd’s (華興資本), plunged after the company said in a filing to Hong Kong’s stock exchange that it had lost touch with chairman and chief executive officer, Bao Fan (包凡).
Bao’s disappearance followed a crackdown on technology companies in the past two years that officials in China said had been wrapped up.
The Shanghai Composite gave up 0.77 percent to 3,224.02, down 1.12 percent for the week, while Australia’s S&P/ASX 200 shed 0.86 percent to 7,346.8, for a weekly drop of 1.17 percent.
India’s SANSEX fell 0.52 percent to 61,002.57, up 0.53 percent from the previous week.
Bangkok’s SET fell 0.4 percent to 1,651.67, down 0.77 percent weekly, after the government reported that the economy grew at a meager 2.6 percent annual pace last year.
The economy slowed more than expected in the last quarter of the year, to a 1.3 percent annual expansion, as a rebound in tourism failed to make up for weaker exports. On a quarterly basis GDP fell 1.5 percent in the October-to-December period.
Additional reporting by staff writer, with CNA
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.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
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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