Dhaka, Bangladesh
Most Asian markets down as fears grow for US tax reform

Most Asian markets down as fears grow for US tax reform

HONG KONG, Nov 14: Asian markets mostly fell on Tuesday following a tepid lead from Wall Street, while investors await movement on stalled US tax cuts with fears growing that the reform push could come off the rails, reports AFP. After weeks of gains fuelled by strong earnings and optimism about the global economy, world markets have been tempered in recent days as dealers cash out and valuations sit unnervingly high. In Washington, Republican lawmakers are struggling to agree a tax overhaul deal with senators and representatives providing differing plans, leading to worries the reforms could collapse in a similar way to the Obamacare repeal. “Tax looks to be getting bogged down in a manner we saw with the attempt to repeal Obamacare and a manner I didn’t expect,” said Greg McKenna, chief market strategist at AxiTrader. “Passage of a bill will be a big boon for markets. But there remains much wood to chop it seems.” World markets had surged on hopes for lower taxes when Donald Trump was elected US president a year ago. Hong Kong fell 0.1 percent and Shanghai retreated 0.4 percent following the release of soft data on Chinese retail sales, factory output and investment. Sydney shed 0.9 percent, Singapore was off 0.4 percent and Seoul shed 0.2 percent. However, Tokyo stocks inched down on Tuesday to extend a losing streak as investors searched for fresh trading pegs after the corporate earnings season. The benchmark Nikkei 225 index edged down 0.98 points to close at 22,380.01, falling for the fifth straight session, while the broader Topix index declined 0.26 percent, or 4.62 points, to 1,778.87. Tokyo shares opened lower on profit-taking as investors cashed in on the recent gains. They soon regained some ground in see-saw exchanges but sank into negative territory in the last minutes of trading. “We are seeing a tug-of-war between profit-taking and bargain-hunting,” said Toshikazu Horiuchi, a broker at IwaiCosmo Securities. “It will take some time to return to an upward trend,” Horiuchi told AFP. The key index hit a quarter-century high last week on easing concerns over geopolitical risks and expectations for sound corporate earnings. “The Nikkei average will possibly correct its (rising) pace in the immediate future. Given that corporate earnings have been strong, however, the drops will not be deep,” Masayuki Kubota, chief strategist at Rakuten Securities, said in a commentary. Makoto Sengoku, market analyst at Tokai Tokyo Research Centre, said Tokyo stocks were now prone to speculative trade, which have resulted in sharp price swings. “Company earnings were largely robust and Tokyo shares rose fast... This has become an incentive for speculation” to reap quick profits, he told AFP. Investors are waiting for an expected US interest rate hike in December, which would push the yen lower to benefit Japanese exporters, as well as progress in US tax reform, he said. The dollar was at 113.61 yen Tuesday afternoon, little changed from 113.63 yen in New York. Shares in tech giant SoftBank fell 1.50 percent to 9,530 yen after it said there was “no final agreement” on an investment in Uber and warned it could pull out of a potential deal if the terms were unsatisfactory. Toshiba jumped 4.65 percent to 292 yen after the Yomiuri daily reported it and manufacturing partner Western Digital had entered in-depth talks on settling a legal dispute over the sale of the embattled Japanese conglomerate’s memory chip unit. The company said it was “always open to discussing potential settlement options” but declined to give further details. Honda lost 0.32 percent to 3,710 yen while Toyota was unchanged at 7,132 yen, but Sony rose 0.51 percent to 5,224 yen. On currency markets the pound stabilised after Monday’s sell-off that was sparked by concerns over British Prime Minister Theresa May’s political future as reports said dozens of her ruling Conservative Party MPs were backing a move to oust her. May’s troubles come as London faces pressure to meet a two-week deadline set Friday by the EU’s chief Brexit negotiator Michel Barnier for a deal on exit terms ahead of a December EU summit. Traders will be keeping an eye on a European Central Bank conference Tuesday that will see speeches by Federal Reserve chief Janet Yellen, ECB head Mario Draghi and Bank of England governor Mark Carney. The US will also release key inflation and retail sales figures later in the week, providing markets with more clues about the Fed’s plans for raising interest rates.

Share |