ASIA MARKETS: Nikkei Slumps To 3-month Low As Asian Markets Dip
18 August 2017 - 11:17AM
Dow Jones News
By Ese Erheriene
Stocks pull back after Barcelona attack, geopolitical
worries
Asian-Pacific stock markets fell Friday, with Japan's Nikkei
hitting a three-month low, pressured by overnight weakness on Wall
Street after days of solid gains.
An attack in Barcelona,
(http://www.marketwatch.com/story/islamic-state-takes-credit-for-deadly-barcelona-attack-on-pedestrians-2017-08-17)
in which at least 13 people died, as well as political
uncertainties in the U.S. and simmering geopolitical tensions had
nervous investors shifting their money from global risk assets to
safer havens.
"We can now see a reversal in fortunes and sentiment
deteriorating," said Chris Weston, chief market strategist at IG
Group. Overnight in the U.S
(http://www.marketwatch.com/story/dow-looks-set-to-break-4-day-win-streak-as-fed-minutes-sink-in-2017-08-17).,
the Dow Jones Industrial Average experienced its biggest decline in
three months, while Wall Street's "fear gauge," the CBOE Volatility
Index , jumped more than 30%.
The Nikkei Stock Average dropped 1.2% after falling to its
lowest level since May. There was added pressure from the advance
of the yen against the dollar--it also gained on the euro and the
British pound, hitting multiweek--as that hurts Japanese exporters.
The yen was last up 0.1% versus the dollar.
But the Nikkei pared its loss, with analysts saying that strong
corporate earnings were providing some support.
Hong Kong's Hang Seng Index fell 1.1%, while Australia's
S&P/ASX 200 narrowed its loss to 0.6%. Korea's Kospi was off
0.1%. In China, the Shanghai Composite Index ended less than 1
point higher.
Financial shares were among the region's biggest decliners. In
Tokyo, life insurers led the way down: Dai-ichi Life Holdings
(8750.TO) fell 2.7% while T&D Holdings (8795.TO) dropped 2.6%.
In Australia, three of the country's four biggest banks -- Westpac
Banking (WBK) , National Australia Bank (NABZY) and Australia and
New Zealand Banking Group (ANZ.AU) -- each fell at least by
1.2%.
Friday's declines reflect investors' increasingly downbeat
attitude about stocks, said Soichiro Monji, general manager of
economic research at Daiwa SB Investments. More investors fear
returns are falling due to slower growth, he said, while risks
remain abundant.
"Profit-taking kicks in when stocks make some advance," Monji
said.
Meanwhile, further woes in the Trump administration risk hurting
market confidence and business sentiment globally, analysts say.
Overnight, U.S. government-bond prices briefly surged on rumors
that the director of the U.S. National Economic Council, Gary Cohn,
was resigning after President Donald Trump's remarks on the
violence in Charlottesville, Va.
White House aides later told The Wall Street Journal that Cohn
hadn't resigned and didn't plan to, but the market response showed
how closely traders are following events at the White House. Prices
for most U.S. government bonds have since declined with yields
higher in Asian trade.
Given the run-up in U.S. valuations following the presidential
election, "it is better to look for opportunities outside of the
U.S., where there is better momentum for growth or reform," said
Paul Flood, a multiasset portfolio manager at Newton Investment
Management, which manages 90 billion Australian dollars (US$71
billion) in assets.
Read:Team Trump losing Gary Cohn could crash the stock market,
warns Yale professor
(http://www.marketwatch.com/story/team-trump-losing-gary-cohn-could-crash-the-stock-market-warns-yale-professor-2017-08-17)
(END) Dow Jones Newswires
August 18, 2017 06:02 ET (10:02 GMT)
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