Daily Management Review

Risks of trade war put pressure on Asian shares


03/22/2018


The dollar declined after the US Federal Reserve System (FRS) warned about a faster pace of rate hikes this year. Concerns over the upcoming announcement of US President Donald Trump about trade restrictions are putting pressure on Asian stocks, reports Reuters.



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The Japanese Nikkei 225 index added 0.99%. Traders returned to the exchanges after the day off. The leaders of growth were shares of the energy sector, as oil rose on the eve of unexpected data on the reduction of stocks in the US.

The cost of May futures for Brent crude oil decreased by $ 0.09 (-0.13%) to $ 69.38 per barrel. On Wednesday, the price of contracts increased by $ 2.05 (3.04%) and reached $ 69.47 per barrel.

The South Korean KOSPI index on Thursday increased by 0.44%. The New Zealand S&P/NZX 50 sank 0.09% after the central bank of the country did not change the parameters of monetary policy.

The Australian S&P/ASX 200 fell by 0.22%. Data on the labor market showed that 17.5 thousand jobs were created in the economy instead of the expected 20 thousand in February. At the same time, the full-employment indicator showed significant growth, according to MarketWatch.

Hong Kong's Hang Seng Index fell by 0.6%. Shares of technological giant Tencent Holdings fell by 3.6%. Earlier, the company said that investments in content and technology will put pressure on the profitability of the core business. At the same time, the profits of the Internet giant in the IV quarter exceeded the forecast.

Meanwhile, Hong Kong's monetary regulator raised the base rate by 25 bp. up to 2%.

The Chinese index of Shanghai Composite has lost 0.6%, Shenzhen Composite has fallen by 0.5%.

The People's Bank of China on Thursday raised the seven-day reverse REPO rate by 5 basis points to 2.55% per annum.

Investors are waiting for the decision of the US president, who will announce restrictive trade measures against China today at 12:30 am Washington time (19:30 MSK).

The dollar continues to decline to major currencies after the fall of the day caused by the outcome of the meeting of the US Federal Reserve.

Earlier, the regulator, as expected, raised the rate for federal funds by 25 basis points to 1.5-1.75% per annum.

The US Central Bank has raised forecasts of GDP growth for this and the next years. The Fed expects that the interest rate will be increased two more times in 2018.

The regulator's statement was less "hawkish" than expected. Some investors believed that the Fed will forecast another three rate hikes this year.

US stock indices finished trading on Wednesday with a decline. The S&P 500 and the Dow Jones Industrial Average lost 0.18%. Nasdaq Composite fell by 0.26%.

source: reuters.com