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Asian markets in retreat after week-long rally
HONG KONG, Jan 14, 2019 (BSS/AFP) – Hong Kong led a sell-off across Asian
markets Monday as profit-takers moved in following a six-day rally, while
traders look ahead to the release of corporate earnings.
With few catalysts to drive buying, equities were ripe for selling after
last week’s healthy gains, with the US government shutdown — now in its
fourth week and showing no sign of ending soon — instilling a sense of
unease.
Also on the agenda is Tuesday’s key Brexit vote, with British Prime
Minister Theresa May making an 11th hour appeal to MPs to pass her agreement
with the EU, which is expected to be voted down by a wide margin.
In early trade Hong Kong shed more than one percent after chalking up
gains of more than six percent over the previous six trading days, while
Shanghai eased 0.2 percent and Sydney lost 0.1 percent.
Singapore slipped 0.5 percent with Taipei 0.4 percent lower, Manila down
0.9 percent and Jakarta losing 0.3 percent.
Tokyo was closed for a holiday.
The losses follow a negative lead from Wall Street, where all three main
indexes fell Friday, ending a healthy week that had been boosted by optimism
China and the US are edging towards a trade deal, while the Federal Reserve
indicated it could pause its interest rate hikes.
Trifecta Consultants analyst Sukrit Vijayakar said the “optimism
surrounding the US-China trade talks faded”, pointing out that while
statements from both sides were positive, they were vague and “lacked
concrete details”.
Data Monday showed China’s trade surplus with the US — a major source of
anger for President Donald Trump — widened 17.2 percent last year.
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– Focus on results –
There are growing concerns that the partial government shutdown of the US
government, which has seen hundreds of thousands of federal workers go
unpaid, could also impact the world’s number one economy.
With Democrats refusing to give in to Trump’s demands for cash to pay for
a Mexican border wall, there is no end in sight in the row, which Standard &
Poor’s estimates has already cost the US more than $3 billion.
Stephen Innes, head of Asia-Pacific trade at OANDA said that could see
markets “pay increased attention to this issue as those numbers are not small
potatoes”.
Dealers are now looking at the business reporting season, which starts in
earnest this week, with some fears of weak results as the global economy
shows signs of slowing.
The tech sector will be closely scrutinised after Apple earlier this month
lowered its revenue forecasts for the key December quarter, while rival
Samsung flagged a near 30 percent drop in operating profit.
On currency markets the pound is holding up despite May’s expected defeat
in Tuesday’s vote, with lawmakers across all parties against her deal.
The opposition Labour Party suggesting it will seek a no-confidence vote
in the government soon afterwards, which could fan further uncertainty and
possibly lead to another general election.
– Key figures around 0230 GMT –
Hong Kong – Hang Seng: DOWN 1.2 percent at 26,359.89
Shanghai – Composite: DOWN 0.2 percent at 2,548.69
Tokyo – Nikkei 225: Closed for a public holiday
Euro/dollar: DOWN at $1.1465 from $1.1467 at 2130 GMT on Friday
Dollar/yen: DOWN at 108.44 yen from 108.52
Pound/dollar: UP at $1.2848 from $1.2846
Oil – West Texas Intermediate: UP 11 cents at $51.70 per barrel
Oil – Brent Crude: UP two cents at $60.50 per barrel
New York – Dow: FLAT at 23,995.95 (close)
London – FTSE 100: DOWN 0.4 percent at 6,918.18 (close)
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