MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 1.56% and was headed for its worst week in three months with an almost 3% loss
Asian shares are set to end the week down, as uncertainty across some economies added to headwinds for investors even as the global rate easing cycle gets under way.
It has been a volatile week in markets, with a tech sell-off triggered by deepening Sino-U.S. trade tensions, uncertainty over U.S. President Joe Biden’s fate in the presidential race, disappointing Chinese economic data and a lacklustre third plenum outcome casting a shadow over the global mood.
In the foreign exchange market, Tokyo’s recent bouts of intervention also kept traders on edge.
We could just be getting a taste of things to come. And that is more turbulence, according to Matt Simpson, senior market analyst at City Index.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 1.56% and was headed for its worst week in three months with an almost 3% loss.
Japan’s Nikkei dropped to a more than two-week low and was 0.09% lower, extending its steep 2.4% decline from the earlier session.
The Nikkei was on track to drop 2.7% for the week, also its sharpest weekly drop in three months.
European shares looked set for a mixed start, with EUROSTOXX 50 futures 0.08% higher, while FTSE futures dropped 0.4%.
S&P 500 futures gained 0.16%, while Nasdaq futures added 0.3%.
Technology stocks continued to struggle, with South Korea’s tech-heavy KOSPI index and Taiwan stocks both dropping 1.5% and 2%, respectively.
South Korean chipmaker SK Hynix slipped more than 1%, though Japan’s Tokyo Electron, a chipmaking equipment manufacturer, rebounded around 2.5%, after an 8.75% decline on Thursday.
Shares of Taiwan’s TSMC, the world’s biggest contract chipmaker, dropped 2.7%, even after the firm posted better-than-expected earnings on Thursday and raised its full-year revenue forecast.
In China, investors were left disappointed over the lack of details provided on the implementation steps for achieving economic policy goals at the conclusion of its closely watched plenum on Thursday.
Chinese officials on Friday acknowledged that the sweeping list of economic goals contained “many complex contradictions”, pointing to a bumpy road ahead for policy implementation.
Chinese blue-chips were last a touch higher, though the CSI300 Real Estate index slipped more than 2%, as a troubled property sector continued to weigh on China’s growth outlook.
The Shanghai Composite Index dropped 0.08%, while Hong Kong’s Hang Seng index declined 2.1%.
Apart from very broad-brush platitudes devoid of stimulus, economic policy references of quality over quantity may also imply willingness to stomach slower overall growth, according to Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank.
The onshore yuan was weaker on the day at 7.2666 per dollar.
