LONDON, Oct 8 — The dollar fell today, with the New Zealand dollar leading gains against the US currency, as a rally in Asian equities spilled over into currency markets. Despite doubts a trade deal will be reached when trade talks between Beijing…
HONG KONG, Sept 18 — Asian equities were mixed today, with attention turning to the Federal Reserve's key policy decision later in the day, while investors remain on alert for developments in the Middle East after the attack on Saudi oil…
HONG KONG, Sept 12 — Signs of easing tensions between China and the US in their trade row fuelled hopes of a breakthrough in high-level talks next month but Asian markets were mixed as dealers struggled to extend this week’s healthy rally….
HONG KONG, Sept 10 — The pound bounced today after Prime Minister Boris Johnson again failed to get MPs to back a snap election. Just before Westminster lawmakers broke up for five weeks, they inflicted yet another defeat on the new premier, who…
HONG KONG, Sept 5 — Most Asian equities and currencies rallied today, building on the previous day’s advance as investors were cheered by a number of positive developments on trade, Hong Kong and Europe. Markets were already on an upward…
BENGALURU: Foreign investors dumped Asian equities in the first six days of August after two months of buying, as the United States ramped up pressure on China with a US$300 billion (RM1.26 trillion) trade barrage last week.
Overseas investors sold about US$4.5 billion of regional equities during the period, data from stock exchanges in South Korea, Taiwan, India, Thailand, Philippines, Indonesia, and Vietnam showed.
Sharp outflows from Asian markets point to increased worries that trade tensions between the world’s two top economies could escalate, and regional economies and corporate earnings might deteriorate further.
US President Donald Trump said last Thursday he would slap a 10% tariff on the re-maining US$300 billion of Chinese imports starting Sept 1, marking an end to a truce in the year-long trade war that was struck in June.
In response, China let its currency weaken 1.4% on Monday, sending it past the key 7-per-dollar level for the first time in more than a decade, and then the United States labelled Beijing a currency manipulator.
MSCI Asia-ex-Japan index had fallen 6.4% this month as of Tuesday’s close, after shedding 1.7% in July.
“Recent foreign outflows from Asian equities clearly suggest that investors are getting nervous on markets given escalating trade tensions,” said Chetan Seth, a strategist for Nomura Securities in Singapore.
It might get harder for the US and China to ease or soften these tensions given how events have unfolded over the last few days, he said.
Goldman Sachs said markets were pricing in a less than 15% chance of a trade deal being agreed. It estimated 13% and 8% cumulative earnings downside for MSCI China and MSCI Asia-ex-Japan in 2019-2020 under a “no deal” scenario.
Taiwan and India saw the biggest outflows in Asia, with net selling of US$1.8 billion and US$1.1 billion respectively. South Korea also witnessed out-flows, of US$919 million.
Taiwan and South Korean companies are more exposed to the Sino-US trade tussle as they have extensive ties with tech firms in China and are part of their supply chains.
Indian shares were undermined last month after the federal budget raised import tariffs on many items, increased taxes on the rich and proposed changes in shareholding norms.
A slew of disappointing earnings by Asian firms for the second quarter also increased investor caution on regional markets.
“So far 1H earnings in Asia-ex-Japan markets have been below estimates – although it’s still early days. The question investors need to answer is what happens to 2020 earnings as markets in 2H will start discounting next year’s earnings,” said Seth. “If trade tensions persist, there may be more downside to current con-sensus earnings estimates.”
In July, foreigners invested US$234 million in Asia, much less than US$4.2 billion inflows in June.
HONG KONG, June 24 — Oil prices extended gains today as rising US-Iran tensions fuelled supply concerns, while Asian equities also edged up ahead of a crunch meeting between Donald Trump and Xi Jinping this week. Both main crude contracts are up…
HONG KONG, June 21 — Oil prices ticked lower today following the previous day’s surge fuelled by tensions between the United States and Iran, while Asian equities turned negative as investors took their foot off the pedal following a recent…