Home / International/ Foreigners pare holdings in Asian equities at start of February amid stocks rout

Foreigners pare holdings in Asian equities at start of February amid stocks rout


Comments / {{hitsCtrl.values.hits}} Views / Thursday, 8 February 2018 00:00


 

Reuters: Foreigners trimmed their holdings in Asian equities in the first week of the month, as regional markets were enveloped in a broad global equities sell-off and surging volatility in the wake of rising US bond yields.

Exchange data showed, foreigners sold about $2 billion in South Korean equities and $1.3 billion in Taiwan equities so far this month. Indonesia, Philippine and Thailand markets also saw outflows in that period.

The sell-off was triggered by a sharp rise in US bond yields following Friday’s data that showed US wages increasing at the fastest pace since 2009, raising the alarm about higher inflation and with it potentially higher interest rates. The 10-year US Treasuries yield dropped to 2.7659 on Wednesday in Asian hours after rising to a four-year high of 2.885 earlier this week.

Frank Benzimra, head of Asia equity strategy at Societe Generale in Hong Kong, said flows into Asia financial assets depend on US financial conditions such as S&P returns, the CBOE Volatility index (VIX) and credit spreads.

“Financial conditions in the US are going to be more challenging than last year given higher volatility, the S&P risk (especially if US-Treasury resumes their rise) and the risk of credit spread widening,” Benzimra said. The CBOE Volatility index, the closely followed “fear-index” measure of expected near-term stock market volatility, jumped to a 2-1/2 year high of 37.32 on Tuesday. It was last trading at 29.98.

 


Share This Article


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 Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.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

Tamil actor Kamal Haasan stars in new role as political leader

Saturday, 24 February 2018

Srinivasan Kamal Haasan is one of India’s foremost film actors. Known popularly as Kamal, the talented and versatile thespian has not only excelled as an actor onscreen, but has successfully engaged in other cinematic spheres too. The multi-faceted


Yameen’s economic offensive to counter political adversity ahead of presidential poll

Saturday, 24 February 2018

The embattled Maldivian President Abdulla Yameen, who is facing intense political opposition both in and out of the country, hopes to win the September, 2018 presidential election using a combination of political belligerence and a strong economic pr


In the end, there was nothing

Saturday, 24 February 2018

Much more than a storm in a tea cup! To a non-discerning person, it all seemed like the final battle of the counter revolution. President Sirisena was up in smoke trying to oust Prime Minister Ranil Wickremesinghe for no articulated reason. He asked


Shouldn’t Govt. prevent parliamentary system from decay and destruction?

Friday, 23 February 2018

The wrong people teach us the best lessons. As a clever nation, we had always used our ballot and chased the wrong people


Columnists More