Asia equities dip as Trump rally fades

18-Feb-2017 Intellasia | AFP | 6:00 AM Print This Post

Most Asian markets eased further Friday as investors cashed out following a healthy run-up over the past week and after Wall Street’s Trump-fuelled surge finally came to an end.

Equity markets around the world are sharply higher since Donald Trump last Thursday pledged a “phenomenal” tax reform package soon, fuelling hopes he would press on with plans to fire the US economy.

The remarks were the spark for all three main Wall Street indices to hit record highs for five successive days, with help also coming from Federal Reserve boss Janet Yellen’s upbeat assessment of the outlook for the US and hints at a March interest rate hike.

However, analysts said despite the bright week for markets there remained a lot of uncertainty, particularly with Trump’s first weeks in office engulfed in controversies, most recently over his relationship with Russia.

“The current political landscape is unlikely to change soon, nor will the debates surrounding tax, fiscal and Fed policies,” said Stephen Innes, senior trader at forex firm OANDA.

“As such we should expect the markets to come under renewed pressure and to be severely tested in the weeks to come,” he said in a commentary.

In early trade Hong Kong stocks were down 0.2 percent while Sydney and Seoul each shed 0.1 percent.

Tokyo lost 0.6 percent by the break but Shanghai edged up 0.1 percent. Singapore rallied 0.4 percent following data showing the city-state’s economy grew at its fastest pace in five years during October-December.

The dollar was also struggling to break out against its major peers despite Yellen’s comments this week to Congress that the economy continued to improve and left open the chance of a March rate hike.

The greenback climbed around three percent from its levels just before Trump’s tax comments – to flirt with the 115 yen mark Thursday. But it retreated in New York and was sitting at 113.41 yen in early Asia trade.

In company news, Seoul-listed Samsung Electronics was down 1.6 percent following news that the heir to the tech giant had been arrested as part of a probe into corruption and influence-peddling that caused President Park Geun-Hye to be impeached.

– Key figures around 0230 GMT -

Tokyo – Nikkei 225: DOWN 0.6 percent at 19,237.27 (break)

Hong Kong – Hang Seng: DOWN 0.2 percent at 24,066.41

Shanghai – Composite: UP 0.1 percent at 3,232.30

euro/dollar: DOWN at $1.0670 from $1.0678

Pound/dollar: UP at $1.2501 from $1.2491

Dollar/yen: UP at 113.40 yen from 113.23 yen

Oil – West Texas Intermediate: UP nine cents at $53.45 per barrel

Oil – Brent North Sea: UP 10 cents at $55.75

New York – Dow: UP less than 0.1 percent at 20,619.77 (close)

London – FTSE 100: DOWN 0.3 percent at 7,277.92 (close)


Category: FinanceAsia

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