Thursday, March 28, 2024 | Ramadan 17, 1445 H
broken clouds
weather
OMAN
23°C / 23°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Asia stocks hit by fears over Trump economic agenda

1046627
1046627
minus
plus

TOKYO: Asian shares slumped on Wednesday after Wall Street was knocked hard in the wake of a delay to a US healthcare reform vote, while the euro rallied after European Central Bank President Mario Draghi hinted that the ECB could trim its stimulus this year.


Financial spreadbetters see weaker openings for European markets, with Britain’s FTSE 100, Germany’s DAX and France’s CAC 40 all seen losing ground in early trade.


MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4 per cent, pulling further away from more than two-year highs probed earlier this week. On Monday, it touched its highest level since May 2015


“We’ve had a pretty good run,” said Sean Darby, chief global equity strategist at Jefferies. “I suspect what people have owned has done very well, and they want to sell some of those positions.”


Japan’s Nikkei share average ended down 0.5 per cent, facing headwinds from the dollar’s reversal of its rise against the yen. But the banking and insurance sectors outperformed on expectations of higher rates.


The yield on US Benchmark 10-year Treasury notes stood at 2.213 per cent in Asian trade, above its US close of 2.198 per cent on Tuesday. It rose from 2.14 per cent late on Monday after Federal Reserve chief Janet Yellen said that it is appropriate to gradually raise US rates.


“Yellen’s comment is supporting Japanese financial stocks today, and for the long-term, Japanese stocks are on the rising trend supported by US-led global economic recovery,” said Mutsumi Kagawa, Chief Global Strategist at Rakuten Securities.


On Tuesday, the benchmark S&P 500 posted its biggest one-day drop in about six weeks and closed at its lowest point since May 31, after the US Senate’s move to delay voting on a healthcare reform bill rekindled worries on the timeline for President Donald Trump’s business-friendly policies.


US stocks accelerated their losses after Senate Republican leader Mitch McConnell decided to put off a planned vote on a bill to dismantle the Affordable Care Act until after the Senate’s July 4 recess, to get more time to garner sufficient votes for its passage.


Against the perceived safe-haven yen, the dollar slipped 0.3 per cent to 112.135 after rising as high as 112.285 yen, its highest since May 17.


The dollar index, which gauges the US currency against a basket of six major counterparts, edged down 0.1 per cent to 96.300, well below its previous session high of 97.447.


The euro was up 0.5 per cent at $1.13610 after rising to a one-year high of $1.13665 after Draghi, speaking to a conference in Portugal, said the ECB could adjust its policy tools as economic prospects improve in Europe.


Some strategists said that once the dust settled from the impact of his comments, the euro could give back some of its gains.


“To me, it seems the change in policy will not be very substantial, so I think in the coming days, ECB officials will try to water down Draghi’s comments,” said Masafumi Yamamoto, Chief Forex Strategist at Mizuho Securities in Tokyo.


The greenback slumped against the Canadian dollar after Bank of Canada Governor Stephen Poloz told CNBC in an interview that it looks as if the central bank’s rate cuts have done their job. The US dollar was down 0.4 per cent at Cad$1.3144, after plumbing its lowest levels since February.


The weaker dollar helped bolster spot gold, which was up 0.4 per cent at 1,251.59 per ounce. — Reuters


SHARE ARTICLE
arrow up
home icon