Asia stocks steady after Wall Street tech rout, dollar holds gains

An electronic board shows the Nikkei share average (top) and the Japanese yen's exchange rate against the US dollar at the Tokyo Stock Exchange (TSE) in TokyoJanuary 30, 2014. — Reuters picAn electronic board shows the Nikkei share average (top) and the Japanese yen’s exchange rate against the at the Tokyo Stock Exchange (TSE) in TokyoJanuary 30, 2014. — Reuters picSINGAPORE, June 16 — Asian stocks were steady today, appearing to take in stride the resumption of the US technology rout overnight, while the dollar held near a two-week high after solid economic data backed the case for tighter US monetary policy.

MSCI’s broadest index of Asia- shares outside Japan was flat, on track to end the week down 0.7 per cent.

Japan’s Nikkei jumped 0.5 per cent, narrowing its loss for the week to 0.4 per cent.

Overnight, the Nasdaq led losses on Wall Street with a 0.5 per cent drop, dragged lower by shares including and Alphabet that tumbled on bearish analysts’ reports. The S&P 500 technology index also declined 0.5 per cent.



The broader S&P 500 index fell 0.2 per cent and the Dow Jones Industrial Average slipped 0.1 per cent.

“It was a brutal day for the tech sector once again as investors are increasingly more worried about the (Federal Reserve) tightening cycle and how that would put a number of firms in trouble,” Naeem Aslam, chief market analyst at ThinkMarkets in London, wrote in a note.

“The tech boom has been on the back of easy money and lower interest rates. Both of them are leaving town.”

South Korea’s KOSPI shook off the US woes to inch higher, with the biggest company, Electronics jumping 0.5 per cent early today.

The second biggest firm, semiconductor concern SK Hynix , climbed 1.5 per cent to a 15-year high.

Analysts have attributed the outperformance of Asian technology company shares to their lower valuations relative to US peers.

In currencies, the dollar remained near a two-week high hit overnight after data showed the number of Americans filing for unemployment fell more than expected last week.

A better-than-expected business conditions survey for June also bolstered the case for Fed tightening this year.



The dollar index, which tracks the greenback against a basket of trade-weighted peers, inched up almost 0.1 per cent, extending yesterday’s 0.5 per cent gain. It’s on track for a 0.2 per cent rise this week.

The dollar was also marginally higher at 110.98 yen , adding to yesterday’s 1.2 per cent jump, poised to end the week 0.6 per cent higher.

“There is certainly an elevated risk (USD outperformance) materialises and if trading is, by and large, a play on probability I would be looking at USD longs with increased convictions,” Chris Weston, chief market strategist at IG in Melbourne, wrote in a note.

“Of course, today’s Bank of Japan meeting (no set time) poses a risk, but little is expected in the way of catalysts, although we have seen some commentary of late from BoJ members and a focus on its ‘exit strategy’.”

The Bank of Japan is expected to leave monetary policy unchanged and signal confidence in a strengthening economy, as a tightening job market and solid global demand support a view that a recovery is gaining momentum.

Sterling added 0.1 per cent to US$1.277 (RM5.45). 

Yesterday, it jumped to as high as US$1.28 on signs of a shift in the Bank of England’s stance on keeping interest rates at , but fell back to close flat.

In commodities, oil was lower on continued worries over rising US gasoline inventories adding to already elevated global supply.



US crude fell 0.1 per cent to US$44.39 a barrel, remaining near yesterday’s six-week low, on track for a 3.1 per cent drop for the week.

Global benchmark also slipped 0.1 per cent to US$46.86, set to end the week 2.7 per cent lower.

crept higher following yesterday’s 0.6 per cent drop on the dollar’s strength. It was marginally higher at US$1,254.25 an ounce early today, but still poised to close the week with a 0.9 per cent loss. — Reuters 

Source: The Malay Mail Online






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