The global pullback in equity markets continued in Asia on Wednesday, where stocks opened lower across the board, following the firing of U.S. Secretary of State Rex Tillerson.
In China, better-than-expected economic data raised the specter that the central bank might be forced to raise interest rates to keep growth from overheating.
Chinese industrial-production and fixed-asset investment data showed the economy grew much faster than expected in the first two months of 2018. That came after consumer prices unexpectedly rose in February during the Lunar New Year holiday.
“We feel that inflation is going to pick up and there will be some modest price pressure,” said Irene Cheung, senior foreign exchange strategist for Asia at ANZ.
That may force the People’s Bank of China to raise its key seven-day policy rate this year, she added. “That would have a slight dampening effect on the economy overall,” she said.
Chinese stocks
SHCOMP, -0.60%
were down about 0.5% and Hong Kong equities
HSI, -1.32%
were more than 1% lower.
Financial and tech stocks, key soft points for the U.S. market on Tuesday, lagged behind in Hong Kong also.
Japan’s Nikkei Stock Average
NIK, -0.82%
finished the morning session down 1% after the yen weakened and then rebounded overnight to leave it at around ¥106.50 per U.S. dollar. Minutes from the Bank of Japan’s January meeting, released Wednesday, showed that some board members warned the central bank should keep a close eye on unexpected side effects from the current monetary policy.
Financial stocks were also hit by falling bond yields; their recent gains have raised hopes of higher earnings for banks and insurers.
Meanwhile, chip makers Renesas Electronics
6723, -3.80%
and Rohm
6963, -1.98%
dropped 4.1% and 2.5%, respectively, after a U.S. index of chip stocks fell 1.6% Tuesday and the Nasdaq Composite’s seven-day winning streak was snapped. Late Monday, President Donald Trump blocked an effort by Broadcom
AVGO, -0.62%
to acquire Qualcomm
QCOM, -4.95%
, citing a national security threat.
The benchmark for Taiwan’s tech-heavy stock market
Y9999, -0.41%
was down 0.4%. Korea’s Kospi
SEU, -0.48%
eased 0.5% even though Samsung Electronics erased early declines.
Meanwhile, signs have emerged that corporate earnings have started to ease in some parts of the Asia-Pacific region, notably South Korea and Taiwan, said Sean Taylor, chief investment officer for Asia-Pacific at Deutsche Asset Management.
“We’ve taken money out of Asia and put it into the rest of emerging markets,” he said.
Australia’s stock benchmark
XJO, -0.66%
fell 0.8%, hurt again by weakness in commodity related stocks. Crude futures rose slightly in Asian trading as a U.S. industry group issued upbeat weekly inventory data.
Source : MTV
