At noon, Asian shares fall, Turkish lira pushed to record lows

At noon, Asian shares fall, Turkish lira pushed to record lows

ANKARA,. Asian stock markets fell today despite signs of greater government support for firms in China, with global trade tensions clouding the outlook for demand.

The US dollar was near its highest levels in 13 months, while concerns over disputes with Washington pushed the Turkish lira to record lows and piled pressure on the Russian rouble.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.5 per cent.

A drop in South Korean tech companies dragged Seoul’s Kospi down 0.7 per cent, as the country’s finance ministry highlighted high oil prices and US interest rate hikes as risks.

Worries over the tit-for-tat Sino-US trade conflict dragged on shares in China, with the Shanghai Composite index dipping 0.1 per cent.

But the tech-heavy ChiNext Composite index rose 0.6 per cent, extending yesterday’s strong gains.

Josh Sheng, chief investment officer at Shanghai Tongshengtonghui Asset Management, said that reflected moves by Beijing to boost local firms, such as revamping a government leadership group to focus on supporting homegrown technology.

“The market in China is ‘risk on’ thanks to government support policies and rising infrastructure investment. I am optimistic about the A-share market for the rest of 2018,” he said.

Elsewhere, Japan’s Nikkei stock index fell 0.5 per cent even as data showed the country’s economy expanded at a faster-than-expected annualised rate in the second quarter.

US President Donald Trump is pushing Tokyo to sign a free-trade agreement and has threatened to impose higher tariffs on auto imports including those from Japan.

Australian shares were flat after the nation’s central bank left growth forecasts largely unchanged, but trimmed its near-term estimates for inflation.

Wall Street provided little direction for Asian markets, with the Dow Jones Industrial Average falling 0.29 per cent yesterday, the S&P 500 ending 0.14 per cent lower and the Nasdaq Composite adding 0.04 per cent.

Today, S&P E-mini futures were down 0.1 per cent at 2,849.75

US Treasury yields also fell, with the yield on benchmark 10-year Treasury notes at 2.9276 per cent compared with 2.935 per cent at its US close.

Investors were awaiting the release of the US consumer price inflation (CPI) report for July (1230 GMT) for possible clues on interest rates and any signs of an impact from new tariffs. The data is expected to show inflation likely increased 0.2 per cent, after rising 0.1 per cent in June.

Rouble rout

Turmoil in some emerging currencies and the intensifying global trade tensions helped support the dollar today, keeping it near 13-month highs against a basket of its peers.

The dollar index, which measures the greenback’s strength against a group of six major currencies, was up 0.08 per cent at 95.583, after gaining 0.5 per cent overnight. A rise above 95.652 would take the index to its highest since July 14, 2017.

The euro was flat at US$1.1528 (RM4.70) and the dollar was 0.15 per cent lower at 110.90 yen.

The rouble retreated overnight to its lowest since November 2016 on threats of new US sanctions, weakening beyond the psychologically important 65-per-dollar threshold.

Turkey’s lira fell to record lows against the dollar, with a meeting between a Turkish delegation and US officials in Washington yielding no apparent solution to a diplomatic rift over the detention in Turkey of a US pastor.

Deepening investor concerns about Turkey’s authoritarian trajectory under President Tayyip Erdogan and the economic fallout have also weighed on the currency.

Today the lira weakened nearly 2 per cent to as far as 5.65 to the dollar.

Turkish Finance Minister Berat Albayrak is set to unveil the latest plan for Turkey’s economy today.

“Other EM currencies have held their ground against the dollar, having generally been weakening previously,” said analysts at Capital Economics.

“In most cases though, we suspect that this resilience will prove temporary,” they said, highlighting expectations of rising US interest rates and worries over growing US protectionism.

In commodities, US crude oil was flat at US$66.82 a barrel, while Brent crude was less than 0.1 per cent higher at US$72.11 per barrel.

Spot gold was largely steady at US$1211.96 per ounce.

— Reuters