Asia shares down, euro pressured by doubts over Trump's policies, French election




A woman walks past electronic board showing stock prices and Japanese Yen
A woman walks past electronic board showing stock prices and Japanese Yen's exchange rate outside a brokerage at a business district in Tokyo

By Hideyuki Sano

TOKYO (Reuters) - Asian share markets retreated on Wednesday and the euro was pressured as doubts over the policies of U.S. President Donald Trump and an election looming in France sapped investor confidence.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> ticked down 0.3 percent, slipping further from Monday's four-month high, led by 0.9 percent fall in South Korean shares <.KS11>.

Japan's Nikkei <.N225> slipped 0.2 percent.

"The markets are now paying attention to political risks in Europe and the United States, after a rally earlier this week following the strong U.S. payrolls data," said Kenta Tadaide, senior economist at Mizuho Research Institute.

On Wall Street, the S&P 500 <.SPX> ended barely higher while the Nasdaq <.IXIC> edged to a record high as gains in big tech names countered energy declines.

With more than half of the S&P 500 having reported results, fourth-quarter earnings are on track to have climbed 8.2 percent, which would be the best performance since the third quarter of 2014, according to Thomson Reuters I/B/E/S.

A raft of strong global economic data and hopes that Trump's talk of economic stimulus measures had helped to support world share markets, and the dollar, since late last year.

But the lack of detail on Trump's stimulus plans and some other policy stances taken after he was sworn in on Jan. 20 have unsettled investors.

Trump's protectionist leanings on international trade and controversy over his move to temporarily ban the entry of immigrants from seven Muslim-majority countries have caused alarm.

"Corporate earnings have been pretty good so far. But without details of Trump's economic policies, it is hard to become bullish," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Uncertainty on the new administration's currency policy is also keeping foreign exchange markets on edge.

The dollar has been steadily declining against the yen since Trump signaled displeasure with Japan's currency stance on Jan. 31.

The U.S. currency traded at 112.35 yen , having fallen to 111.59 yen on Tuesday, its lowest since late November.

The pair may see limited moves for now as traders look to a meeting between Trump and Japanese Prime Minister Shinzo Abe on Friday.

The euro , on the other hand, shed 0.6 percent on Tuesday and last stood at $1.0682, hit by rising concerns that the far right could win France's presidential vote and take the country out of the euro.

The gap between French and German 10-year borrowing costs widened to 78 basis points, the biggest level since late 2012.

Support for conservative challenger Francois Fillon, who was seen as a frontrunner a few weeks ago, has tumbled in the wake of a financial scandal, losing ground to independent centrist Emmanuel Macron and the anti-EU National Front leader Marine Le Pen.

While most investors expect Le Pen to be defeated in the run-off by a more moderate candidate, markets are nervous after last year's experience of the Brexit referendum and Trump's victory.

In addition, wrangling over Greece's bailout are starting to haunt the market ahead of the euro group meeting on Feb. 20, with two-year Greek debt yield soaring to near 10 percent on Tuesday, compared to around six percent just about two weeks ago.

Elsewhere, the Chinese yuan dipped slightly following Tuesday's data that showed China's foreign exchange reserves unexpectedly fell below the closely watched $3 trillion level in January for the first time in nearly six years.

Still, the market impact was limited as the fall in the reserves, of $12.3 billion to $2.998 trillion, was the smallest in seven months, indicating China's renewed crackdown on outflows appears to be working, at least for now.

The yuan was little changed after dipping to one-week low of 6.847 per dollar in offshore trade and three-week low of 6.8916 in the onshore trade .

"The fall was relatively small and had limited impact on the mainland markets. It is not like we have seen massive capital outflows," said Naoki Tashiro, head of TS China Research.

Oil prices extended falls, as a massive increase in U.S. fuel inventories and a slump in Chinese demand implied that global crude markets remain oversupplied despite OPEC-led efforts to cut output.

International Brent crude futures fell 0.9 percent to $54.55 per barrel. They were down 4.0 percent so far this week.

(Editing by Simon Cameron-Moore)

COMMENTS

More Related News

Pipeline fights move from Dakota prairie to Louisiana bayous
Pipeline fights move from Dakota prairie to Louisiana bayous
  • US
  • 2017-02-22 06:04:38Z

When Hope Rosinski's father gave her a six-acre plot in Louisiana more than a decade ago, she was surprised to find oil and gas pipelines crisscrossing the property. Pipeline companies later secured her permission for two more lines, one of which has since caused flooding and consistently leaves her land saturated. Rosinski is fighting the latest request for a right-of-way, this time from Energy Transfer Partners - the company behind the controversial Dakota Access Pipeline.

Immigration advocates denounce DHS plan to implement Trump executive orders
Immigration advocates denounce DHS plan to implement Trump executive orders

Immigration policy experts lashed out Tuesday at the Department of Homeland Security's plan to implement President Trump's executive orders on immigration. "In my many years of practicing immigration law, I have not seen a mass deportation blueprint like this one," Marielena Hincapié, executive director of the National Immigration Law Center, a Los Angeles-based nonprofit that advocates for the rights of low-income immigrant families, said in a conference call with reporters. In two memos issued Tuesday, DHS Secretary John Kelly laid out sweeping new guidance for officers tasked with carrying out the president's immigration policies.

Trump to spare U.S.
Trump to spare U.S. 'dreamer' immigrants from crackdown
  • US
  • 2017-02-22 02:26:15Z

President Donald Trump's administration plans to consider almost all illegal immigrants subject to deportation, but will leave protections in place for immigrants known as "dreamers" who entered the United States illegally as children, according to official guidelines released on Tuesday. The Department of Homeland Security guidance to immigration agents is part of a broader border security and immigration enforcement plan in executive orders that Republican Trump signed on Jan. 25. Former President Barack Obama, a Democrat, issued an executive order in 2012 that protected 750,000 immigrants who had been brought into the United States illegally by their parents.

Denver defends release of illegal immigrant later charged in murder
Denver defends release of illegal immigrant later charged in murder
  • US
  • 2017-02-22 02:03:58Z

The Denver Sheriff's Department on Tuesday defended its release of an illegal immigrant after he posted bond on theft charges only to be arrested for murder weeks later, saying it had no authority to hold him. Ever Valles, 19, a Mexican national, was released from the Denver jail in late December. The case has drawn parallels to the 2015 murder of a 32-year-old woman, Kathryn Steinle, who was fatally shot at a San Francisco tourist site by a five-time deported Mexican immigrant.

Elevator scion who defaced Trump
Elevator scion who defaced Trump's Hollywood star gets probation
  • US
  • 2017-02-22 01:36:29Z

The elevator company scion who defaced Donald Trump's star on the Hollywood Walk of Fame during the presidential campaign last autumn pleaded no contest on Tuesday to felony vandalism and received three years' probation. James Lambert Otis, 53, has admitted using a sledgehammer and pickax to smash the pink terrazzo star and remove the brass medallion from the center of the sidewalk plaque in an act of protest caught on video in the predawn darkness in October. Otis, a member of the family behind the Connecticut-based Otis Elevator Company, a leading manufacturer of elevators, escalators and moving walkways, was taken into custody the next day.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Europe

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.