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Asian markets mostly down after mixed lead from Wall St

WT24 Desk

HONG KONG – Asian markets mostly fell Friday with investors treading carefully as global slowdown worries return to the fore, with analysts pointing to an economic divergence between the US and the rest of the world, AFP reports.

Traders have been cheered by a string of better-than-expected earnings
from corporate titans this reporting season, with Facebook, Microsoft and
Amazon adding to the positive mood on Wall Street, but were unable to fuel
broad gains.

However, there have been a couple of misses from other top firms, while
crucially a series of downbeat data and central bank caution have dampened spirits.

Central banks in Japan, Sweden, Turkey and Ukraine, with an eye on the
global outlook, on Thursday took a dovish turn and flagged softer policy in
the near future. That came after a growth forecast cut by the Bank of Canada. Meanwhile low inflation has led to speculation the Reserve Bank of
Australia could soon cut borrowing costs, while the European Central Bank is battling weak eurozone growth.

On top of that, a drop in German business confidence fanned worries about
the bloc’s biggest economy, while South Korea saw its worst performance in 10 years during the first quarter.

But while the Federal Reserve has said it will not likely raise interest
rates this year the US economy continues to outpace its peers and the jobs
markets is flourishing, with Wall Street hitting new records this week. Eyes
are now on the release of US growth data later Friday.

“While positive earning numbers have lent massive support to US equities,
it’s hard to ignore the inescapable fact that we are back to the divergent
economic narrative where the US economy is on fire while ice water continued to pour over the rest of the globe,” said Stephen Innes of SPI Asset Management.

Shanghai dropped 0.5 percent in the morning, extending losses of more than two percent Thursday as investors fret that a run of market-supporting stimulus measures aimed at supporting the economy could be coming to an end.

Tokyo ended the morning down 0.7 percent, Seoul shed 0.4 percent and
Singapore added 0.1 percent.

There were also losses in Taipei, Wellington and Jakarta.

However, Hong Kong rose 0.3 percent after suffering five straight days of
decline.

The broad losses come at the end of a tough week for markets, which have
enjoyed a blockbuster start to the year, thanks to hopes for China-US trade
talks.

On oil markets both main contracts continued to fall after this week,
hitting six-month highs as traders await the response from OPEC and Russia
after the US said it would not extend waivers that allow certain countries to
buy crude from sanctions-hit Iran.

Observers said that after the jump in prices, selling was to be expected
owing to a number of factors including the China-US trade talks, unrest in
Libya, Venezuela’s political crisis and the OPEC-Russia output caps.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 0.7 percent at 22,155.24 (break)

Hong Kong – Hang Seng: UP 0.3 percent at 29,633.32

Shanghai – Composite: DOWN 0.5 percent at 3,108.34

Euro/dollar: DOWN at $1.1133 from $1.1135 at 2100 GMT

Pound/dollar: UP at $1.2895 from $1.2891

Dollar/yen: UP at 111.73 yen from 111.61 yen

Oil – West Texas Intermediate: DOWN 41 cents at $64.80 per barrel

Oil – Brent Crude: DOWN 31 cents at $74.04 per barrel

New York – Dow: DOWN 0.5 percent at 26,495.56 (close)

London – FTSE 100: DOWN 0.5 percent at 7,434.13 (close)

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