Home / International/ Asia shares slip as Hong Kong unrest, Argentine peso crash rattle investors

Asia shares slip as Hong Kong unrest, Argentine peso crash rattle investors


Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 14 August 2019 00:00


A man walks past a screen showing stock indexes in Hong Kong, China Aug. 5, 2019. Eloisa Lopez, Reuters

 


TOKYO (Reuters): Asian shares fell on Tuesday as fears about a drawn out Sino-US trade war, protests in Hong Kong and a crash in Argentina’s peso currency drove investors to safe harbours like bonds, gold, and the yen.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.26% while Japan’s Nikkeitumbled 1.28%.

The selling in regional markets came as Wall Street stocks took a beating on Monday, with the S&P 500 losing 1.23%.

Sentiment was already weak due to increasing signs that the United States and China will not quickly resolve their year-long trade war. Markets were hit with further turbulence after protesters managed to close down Hong Kong’s airport on Monday.

Traders were also on edge after market-friendly Argentine President Mauricio Macri suffered a mauling in presidential primaries, increasing the risk of a return to interventionist economic policies.

Benchmark 10-year Treasury yields were near the lowest in almost three years, gold was pinned close to six-year highs, and the yen was within a whisker of a seven-month peak versus the dollar in a sign of the heightened anxiety in financial markets already battered by global growth woes.

“The protests in Hong Kong are negative for stocks, which were already in an adjustment phase because there is talk that the trade war will trigger a recession,” said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co.

“Long-term rates will continue to fall, and stocks will adjust lower, but this is temporary. Major central banks are cutting rates, which will eventually provide economic support.”

US stock futures were 0.19% higher early in Asia, which may provide some respite to anxious markets.

Analysts also said that trading could be subdued as many investors are off for summer holidays.

Yet, there was no shortage of gloomy news for investors looking to catch their breath from several months of market ructions.

The Merval stock index crashed 30% and declines of between 18-20 cents in Argentina’s benchmark 10-year bonds left them trading at around 60 cents on the dollar or even lower.

Refinitiv data showed Argentine stocks, bonds and the peso had not recorded this kind of simultaneous fall since the South American country’s 2001 economic crisis and debt default.

The grim backdrop was enough to push investors into safe-havens, and US Treasury yields dropped across the board on Monday as trade worries and political tensions supported safe-haven assets.

In Asia on Tuesday benchmark 10-year Treasuries yields were 1.6505%. On August 7 yields had skidded to 1.5950%, the lowest since October 3, 2016. Hong Kong’s airport, the world’s busiest cargo airport, reopened on Tuesday, which could ease some concern about the immediate economic impact of protests over the past two months. The protests began in opposition to a bill allowing extraditions to mainland China but have quickly morphed into the biggest challenge to China’s authority over the city since it took Hong Kong back from Britain in 1997.

 


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Autocatalytic descent from plural democracy to supremacist authoritarianism

Wednesday, 29 January 2020

In a few days, Sri Lanka will celebrate its 72nd year of independence from colonialism. But behind the pomp and pageant of that celebration is a sad reality of an autocatalytic process – a small initial event triggering a chain reaction that evolve


Trump destroying brand USA: Implications for Sri Lanka

Wednesday, 29 January 2020

There is an old adage that ‘politics and tourism’ has a positive correlation. Many have tried to disprove this aspect but the relationship is coming out very strongly, the latest case study to the world being in the United States. Trump cost $4.


Freedom! Freedom! Where art thou?

Wednesday, 29 January 2020

Freedom: who could object? Yet this word is now used to justify a thousand forms of exploitation. In the name of freedom – the freedom of the powerful to exploit the weak, the rich to exploit the poor. The definition of freedom is, the condition of


Development project information: Public expectations and their right to know

Wednesday, 29 January 2020

Infrastructure development will be at the centre-stage during the next five years, irrespective of which mainstream political party will be in power. This writer has previously had articles published in the Daily FT on building regulations, infrastr


Columnists More