Published by CNBC – 23rd Aug 2017
Most major indexes in Asia closed higher on Thursday despite Wall Street closing lower after a threat from President Donald Trump about a possible government shutdown.
Japan’s Nikkei 225 declined 0.42 percent, or 80.87 points, to close at 19,353.77. Across the Korean strait, the Kospi advanced 0.40 percent, or 9.44 points, to end at 2,375.84.
In Australia, the S&P/ASX 200 added 0.15 percent, or 8.341 points, to close at 5,745.500, with gains in the materials and information technology sub-indexes driving the broader market higher.
The Hang Seng Index rose 0.52 percent by 3:13 p.m. HK/SIN as markets in Hong Kong re-opened after being shut on Wednesday due to typhoon Hato. Markets on the mainland closed lower: the Shanghai Composite erased 0.48 percent, or 15.7124 points, to close at 3,271.9925 and the Shenzhen Composite slid 0.605 points, or 11.5111 points, to finish at 1,890.4844.
Trump on Tuesday in the U.S. said he would be willing to “close down” the government to secure funds needed to build a wall along the U.S.-Mexico border. The president had repeatedly pledged he would construct a border wall that Mexico would pay for as part of his plan to tackle illegal immigration, although Mexico has said it would not be funding the barrier.
During the rally in Arizona, the president also said he believed the U.S. would “end up probably terminating NAFTA.”
Stocks on Wall Street closed lower following Trump’s comments, with the Dow Jones industrial average declining 0.40 percent, or 87.80 points, to close at 21,812.09.
Demand for traditional safe-haven assets eased Thursday after climbing overnight: The dollar climbed back above the 109 handle against the Japanese currency to fetch 109.34 yen at 3:03 p.m. HK/SIN compared to levels as low as 108.82 yen seen earlier in the day. The dollar index, which tracks the greenback against a basket of currencies, firmed to stand at 93.336 compared to an overnight low of 93.126.
Meanwhile, spot gold edged down to trade at $1,285.81 an ounce after fetching as high as $1,291.17 overnight as risk aversion faded during Asian trade. Gold is often regarded as a safe haven by investors during periods of uncertainty.
In corporate news, Samsung Electronics launched its Galaxy Note 8 model in New York on Wednesday. The company was forced to recall its Galaxy Note 7 model last year after a battery problem led to several devices overheating and catching fire. Samsung shares closed higher by 0.08 percent.
Market movers during the session included Australia’s Flight Centre Travel Group, which saw its stock close up 10.66 percent after reporting full-year earnings. The company’s full-year profit decreased by 5.6 percent to A$230.8 million ($182.33 million), but that remained above analyst expectations of A$224.1 million, according to Reuters.
Hong Kong-listed gaming stocks were lower after Macau experienced a power shutdown when typhoon Hato hit the city on Wednesday. Sands China was down 1.13 percent and Melco International Development fell 2 percent by 3:05 p.m. HK/SIN. Power restoration in Macau began Wednesday afternoon, but some residents remained without electricity in the evening, South China Morning Post reported.
With little data due to be released during the Asian trading session, markets likely returned their focus on a central banking conference in Jackson Hole beginning Thursday U.S. time.
“A sense of anticipation can be felt across the financial markets ahead of the Jackson Hole Symposium later this week,” said FXTM research analyst Lukman Otunuga in a Wednesday evening note. While European Central Bank President Mario Draghi is not expected to deliver new policy messaging, the possibility of “verbal intervention to weaken the euro” should not be ruled out, Otunuga added.
The common currency edged down below the $1.18 handle to fetch $1.1792 at at 3:04 p.m. HK/SIN.
In other currencies, sterling remained under pressure although there was no one clear driver. The pound last traded at $1.2798.
“Between the central bank’s ongoing concerns about Brexit, uneven data and the prospect of a stronger dollar, there are many forces driving the pound lower,” BK Asset Management Managing Director of FX Strategy Kathy Lien said in a note.
On the energy front, oil prices eased after gaining more than one percent Wednesday. The rise overnight followed a fall in U.S. crude stockpiles for an eighth consecutive week, according to Reuters. Brent crude futures slid 0.11 percent to trade at $52.51 a barrel while U.S. crude futures shed 0.23 percent to trade at $48.30.
“The street appears to be in a wait and said mode now,” said OANDA senior market analyst Jeffrey Halley, adding that markets awaited evidence that supply in the oil markets was tightening beyond just the U.S.
