Asian traders sit pat, with eyes on passage of US tax cuts

21-Dec-2017 Intellasia | AFP | 6:00 AM Print This Post

Asian markets mostly fell on Wednesday as investors took a breather following recent gains, while US senators voted for a controversial tax overhaul which traders expect to boost corporate profits.

Equities have been on a broad upswing since last week when holdout Republican senators said they would back Donald Trump’s signature tax legislation. The president has promised that the changes will fire up an already healthy US economy.

After months of uncertainty the Senate narrowly passed the deal, which slashes taxes across the board.

The House of Representatives passed the bill on Tuesday but will have to vote again Wednesday owing to a rules mix-up.

Despite the expected passage of the bill, all three main Wall Street indexes ended Tuesday in the red — having clocked up a series of record closes of late — and the weak lead kept Asia tethered.

Hong Kong was down 0.2 percent in the afternoon and Shanghai closed down 0.3 percent, while Singapore shed 0.2 percent.

Tokyo and Sydney each ended up 0.1 percent but Seoul eased 0.3 percent and Jakarta dived 1.1 percent.

Manila and Wellington were also lower.

Expectations that the massive reduction in corporate taxes would boost company profits have helped fuel the surge in equities. But forex traders are more reticent about the effect on the economy.

– Bitcoin dives -

“After all is said and done doubts about the overall economic impact from the US tax bill capped the dollar gains, as the dollar sold off versus the yen and held losses against the euro after the House approved the bill,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

“Currency traders continue to think the economic bump will be small while there’s increasing chatter that the markets have likely overemphasized the impact of tax repatriation flows in the overall dollar narrative.”

Bitcoin plunged around 15 percent Wednesday on news that an exchange in South Korea — where many cryptocurrency traders live — had gone bust.

The unit, which hit a record $19,500 at the start of the week, took a hit as it emerged that Youbit had been hacked, leading the firm to say it would close and enter bankruptcy.

Also on Tuesday US authorities suspended trading in a popular Bitcoin-related stock, citing concerns about market manipulation. The Crypto Company’s share price had risen 1,700 percent between the end of September and Monday evening before the Securities and Exchange Commission intervened to halt trades until January 4.

“Both the news of South Korea’s exchange having been hacked and position adjustment following recent rallies affected the market today,” Raita Yamaguchi, senior consultant at Nomura Research Institute, told AFP.

Bitcoin has soared almost 30-fold since the start of the year and this month saw it move into the mainstream as two major US exchanges began trading futures in the unit.

– Key figures around 0710 GMT -

TokyoNikkei 225: DOWN 0.1 percent at 22,891.72 (close)

Hong KongHang Seng: DOWN 0.2 percent at 29,187.67

ShanghaiComposite: DOWN 0.3 percent at 3,287.61 (close)

euro/dollar: UP at $1.1842 from $1.1840 at 2150 GMT

Pound/dollar: UP at $1.3390 from $1.3384

Dollar/yen: UP at 112.95 yen from 112.86 yen

OilWest Texas Intermediate: UP 18 cents at $57.74 per barrel (new contract)

OilBrent North Sea: UP 14 cents at $63.94 per barrel

New YorkDOW: DOWN 0.2 percent at 24,754.75 (close)

LondonFTSE 100: UP 0.1 percent at 7,544.09 (close)

https://sg.news.yahoo.com/asian-traders-sit-pat-eyes-passage-us-tax-025838638–finance.html

 


Category: FinanceAsia

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