Asia Markets: Asian markets reverse course, give up early gains
Asia Pacific stocks were struggling by midmorning after a broadly higher opening Friday as Chinese equities weakened and pressured neighboring markets lower.
After a jump for U.S. stocks overnight to a fresh record high amid optimism regarding U.S. tax reform, sentiment cooled in Asia as the Senate won’t vote on the Republicans’ proposal until at least Friday. That hurt the dollar and erased initial stock gains in Japan.
The Nikkei Stock Average jumped as much as 1.3% early on, helped by the yen’s overnight weakness. But the currency’s reversal — the dollar JPYUSD, -0.003554% fell to as low as ¥112.33 from ¥112.70 earlier — sent the Japanese stock index into negative territory. The Nikkei NIK, +0.12% was recently down 0.1%.
The dollar-yen’s drop also came as the pair neared resistance around ¥112.79, said United Overseas Bank analyst Peter Chia.
Chinese stocks opened lower, with Shanghai’s market SHCOMP, -0.35% down about 0.2%. That helped erase initial gains for Hong Kong’s Hang Seng Index HSI, -0.13% and Taiwan’s Taiex Y9999, +0.50% , which has struggled the past week amid the selling on the mainland and profit-taking in tech stocks.
In Hong Kong, tech heavyweight Tencent 0700, -2.16% fell another 2%, putting it correction territory for the first time this year after falling 11% from last week’s record high.
Korea’s Kospi SEU, +0.18% slipped 0.2% even as Samsung Electronics 005930, +0.35% ticked up 0.4%. Still, at 8% the week’s drop is set to be the stock’s largest in 5½ years.
Australia’s S&P/ASX 200 XJO, +0.28% though has been holding up with a 0.5% rise. The market was supported by big banks, which reversed Thursday’s broad declines as a judicial inquiry looms for the sector.
As the Dow industrials capped its eighth-straight month higher Thursday, the longest winning streak in 22 years, “equities in the U.S. are like a runaway freight train,” said Tim Kelleher, head of institutional foreign-exchange sales at ASB Bank in New Zealand.
But he added the overnight gain might be viewed skeptically as some of it could be attributed to end-of-month positioning.
Oil prices were slightly higher in Asia after modest overnight moves even as the Organization of the Petroleum Exporting Countries and Russia agreed to extend production curbs. The decision had been expected by the market.
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