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Asian markets suffer as rebound from rout stutters

AFP/APP – A rebound across Asian markets ran out of steam Wednesday, with most falling back into the red and extending the previous day's hammering.

Traders had started the day on a bright note as they took their lead from a surge on Wall Street and ate into Tuesday's deep losses.

The gains, which saw Tokyo and Hong Kong jump sharply, came as analysts said they had expected a pullback following months of rises that sent world markets to record or multi-year highs.

However, as the day wore on selling began to kick in. By the end of the day Tokyo had added just 0.2 percent — having opened almost three percent up — while Shanghai lost 1.8 percent and Seoul plunged 2.3 percent.

Singapore was down 0.6 percent and Hong Kong closed 0.9 percent lower, extending a more than five percent loss in Hong Kong Tuesday. Wellington, Mumbai and Kuala Lumpur also fell, though Sydney held up to close 0.8 percent higher while Taipei climbed 1.4 percent.

Asian trading floors were a sea of red Tuesday after a record one-day points drop on the Dow sparked panic selling, wiping billions from valuations on worries about rising US interest rates.

Profit-taking also played a big role in the retreat after the buying euphoria, fueled by optimism in the world economy and strong corporate earnings.

'Healthy correction'

But while markets stutter, analysts remain upbeat.

“The pullback may be considered a healthy correction,” Candice Bangsund, a fund manager in Montreal at Fiera Capital, told Bloomberg News.

“The favorable conditions that have underpinned the stock market rally over the last year remain largely intact at this time — the global expansion continues and corporate earnings remain in acceleration mode.”

And Greg McKenna, chief market strategist at AxiTrader, said: “At the moment, the safe bet is that this was part of the so-called 'sell-off we had to have'.”

With dealers looking to safer assets Wednesday the dollar resumed its falls against the yen, while it pared morning losses against higher-yielding currencies such as the Australian dollar, South Korean won and Thai baht.

Energy firms across Asia saw sharp afternoon selling on Wednesday, with PetroChina, CNOOC and Sinopec all performing a U-turn in Hong Kong, while Inpex in Tokyo and Woodside Petroleum in Sydney saw morning gains slashed.

Oil prices held on to their gains, however, after a report showed US stockpiles not increasing as much as forecast last week.

Bitcoin was up around 15 percent at $7,500, a day after it fell briefly below the $6,000 mark for the first time since mid-November. However, it is still well down from its record highs near $20,000 seen just six weeks ago

In early European trade London rose 0.8 percent after a 2.6 percent fall Tuesday. Paris jumped 0.4 percent and Frankfurt was 0.6 percent higher.

Key figures around 0820 GMT

Tokyo – Nikkei 225: UP 0.2 percent at 21,645.37 (close)

Hong Kong – Hang Seng: DOWN 0.9 percent at 30,323.20 (close)

Shanghai – Composite: DOWN 1.8 percent at 3,309.26 (close)

London – FTSE 100: UP 0.8 percent at 7,197.38

Euro/dollar: UP at $1.2395 from $1.2381 at 2200 GMT

Pound/dollar: UP at $1.3963 from $1.3949

Dollar/yen: DOWN at 109.21 yen from 109.57 yen

Oil – West Texas Intermediate: UP 50 cents at $63.89 per barrel

Oil – Brent North Sea: UP 57 cents at $67.43

New York – DOW: UP 2.3 percent at 24,912.77 (close)

Posted on: 2018-02-07T14:09:00+05:00
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