Asia stocks brush off Wall St slide

Dhaka,  Tue,  26 September 2017
Published : 24 Aug 2017, 10:45:35

Asia stocks brush off Wall Street slide after Trump's comments, dollar recovers

Asian stocks and the dollar edged up on Thursday, shaking off the risk aversion that gripped financial markets overnight after President Donald Trump threatened to shut down the US government and end the North American Free Trade Agreement.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.4 per cent.

Japan's Nikkei .N225 pulled back 0.1 per cent, with steelmakers slumping after the Nikkei business daily reported that Toyota Motor Corp (7203.T) was looking to cut the price of steel supplied to component makers in the October-March period.

That is the result of lower rates, already agreed for the six months through September with steelmakers such as Nippon Steel & Sumitomo Metal Corp. Four of the five biggest decliners on the index were steelmakers.

Chinese stocks .CSI300 .SSEC were down about 0.3 per cent, and Hong Kong's Hang Seng .HSI jumped 0.45 per cent.

South Korea's KOSPI .KS11 added 0.4 per cent and Australian stocks gained 0.25 per cent.

Overnight, US stock indexes closed between 0.3 per cent .IXIC .SPX and 0.4 per cent .DJI lower.

Trump said at a Tuesday night rally in Arizona that he would be willing to risk a government shutdown to secure funding for a wall along the US-Mexico border. Those comments came ahead of a late-September deadline to raise the US debt ceiling or risk defaulting on debt payments.

Fitch Ratings said on Wednesday that a failure to raise the federal debt ceiling in a timely manner would prompt it to review the US's sovereign rating "with potentially negative implications."

"Asian stocks largely weathered the unexpected shutdown comments... feeling removed from concerns of a government shutdown in the US," Jingyi Pan, market strategist at IG in Singapore, wrote in a note.

"That being said, any pressure within US bourses could still trickle to regional markets and would be one to track in the near term," she said.

The dollar added about 0.2 per cent to 109.195 yen JPY=D4, having lost 0.5 per cent overnight, after managing to contain losses on Wednesday in Asia following Trump's comments.

The dollar index .DXY, which tracks the greenback against a basket of six major peers, gained 0.15 per cent to 93.277 on Thursday, following the previous day's 0.4 per cent slide.

Trump "is using one of his tricks to get what he wants and does not seem to care what could be the consequence for the US shutdown on the economy," said Naeem Aslam, chief market analyst at Think Markets. "What matters the most for Mr Trump is to build the wall, which he promised throughout his campaign."

Also undermining the dollar were Trump's threats to end the North American Free Trade Agreement, after three-day first-round talks that ended on Sunday failed to bridge differences.

Further rounds of talks will take place in September and later this year.

Both the Canadian dollar CAD=D4 and Mexican peso MXN= were little changed at C$1.254 and 17.679 to the dollar respectively.

The euro EUR=EBS was slightly weaker at $1.18005, after climbing 0.4 per cent on Wednesday on strong German and French manufacturing and services sector surveys.

Bitcoin BTC=BTSP inched up 1.3 per cent to $4,160, but remained off its all-time high of $4,480 hit a week ago. It is up 333 per cent this year.

Investors are also keeping a close eye on a central banking conference in Jackson Hole, Wyoming, which begins on Thursday, where Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are both due to speak, although new policy messages are seen as unlikely.

"We are inclined to think that the Jackson Hole symposium will probably disappoint, with central bankers preferring to explain detailed actions in September," Societe Generale analysts wrote in a note.

In commodities, oil prices crept lower as rising US oil output dampened some of the optimism that had accompanied eight straight weeks of declines in US crude inventories.

US crude CLc1 slipped 0.1 per cent to $48.36 a barrel, after rising 2.2 per cent over the previous two sessions.

Global benchmark Brent LCOc1 was marginally lower at $52.54, after climbing 1.8 per cent in the past two days.

Gold XAU= was also steady at $1,289.69 an ounce, retaining Wednesday's 0.4 per cent jump.

US President Donald Trump has called for a "new unity", a day after a campaign-style rally in which he attacked political foes and media.

Speaking in Reno, Nevada, Mr Trump said "we are one people with one home and one great flag".

"In America, we never lose faith, we never forget who we are, and we never stop striving for a better future," he told the American Legion.

Hundreds of protesters gathered outside the convention centre as he spoke.

In a 22-minute address to the veterans' group, Mr Trump read from a teleprompter as he said: "It is time to heal the wounds that have divided us, and to seek a new unity based on the common values that unite us."

He told his audience of more than 5,000 that in the US, "we are not defined by the colour of our skin, the figure on our pay cheque, or the party of our politics.

"We are defined by our shared humanity - by our citizenship in this magnificent nation, and by the love that fills our hearts."

At a raucous rally in Arizona the night before he railed against that state's two senators, both fellow members of his Republican party, and Democrats.

In his 80-minute speech, Mr Trump threatened to shut down the government unless funding was approved for his proposed wall on the US-Mexico border.

He also excoriated media coverage of his statements about violence at a white supremacist march in Charlottesville, Virginia, earlier this month.

Mr Trump selectively quoted his initial response, omitting his much-criticised remark that "many sides" were to blame for clashes that ended with a counter-demonstrator killed.

He also accused the "damn dishonest media" of "trying to take away our culture".

"They're trying to take away our history," he added.

As he spoke, protesters clashed with police outside the venue in central Phoenix.

After Mr Trump's speech on Wednesday in Nevada, Republican Senate leader Mitch McConnell denied a New York Times report that he was angry with the president and doubtful of his ability to lead the party.

"We are committed to advancing our shared agenda together," the Kentucky senator said, "and anyone who suggests otherwise is clearly not part of the conversation."

At the conclusion of Mr Trump's latest speech, he signed into law a measure making it easier for veterans to appeal for disability allowance after their claims are denied.

Earlier this week, he laid out his plan for US troops in Afghanistan, and met with border control agents near the US-Mexico border. 
Editor : A.H.M Moazzem Hossain
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