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Friday, December 3, 2021

Most Asian markets down as fears grow for US tax reform

Most Asian markets down as fears grow for US tax reform

HONG KONG: Asian markets mostly fell on Tuesday following a tepid lead from Wall Street, while investors await movement on stalled US tax cuts with fears growing that the reform push could come off the rails.

After weeks of gains fuelled by strong earnings and optimism about the global economy, world markets have been tempered in recent days as dealers cash out and valuations sit unnervingly high.

In Washington, Republican lawmakers are struggling to agree a tax overhaul deal with senators and representatives providing differing plans, leading to worries the reforms could collapse in a similar way to the Obamacare repeal.

“Tax looks to be getting bogged down in a manner we saw with the attempt to repeal Obamacare and a manner I didn’t expect,” said Greg McKenna, chief market strategist at AxiTrader.

“Passage of a bill will be a big boon for markets. But there remains much wood to chop it seems.”

World markets had surged on hopes for lower taxes when Donald Trump was elected US president a year ago.

Hong Kong fell 0.1 percent and Shanghai retreated 0.4 percent following the release of soft data on Chinese retail sales, factory output and investment.

Sydney shed 0.9 percent, Singapore was off 0.4 percent and Seoul shed 0.2 percent.

However, Tokyo’s Nikkei ended the morning session 0.3 percent higher following a plunge of 1.3 percent Monday.

On currency markets the pound stabilised after Monday’s sell-off that was sparked by concerns over British Prime Minister Theresa May’s political future as reports said dozens of her ruling Conservative Party MPs were backing a move to oust her.

May’s troubles come as London faces pressure to meet a two-week deadline set Friday by the EU’s chief Brexit negotiator Michel Barnier for a deal on exit terms ahead of a December EU summit.

Traders will be keeping an eye on a European Central Bank conference Tuesday that will see speeches by Federal Reserve chief Janet Yellen, ECB head Mario Draghi and Bank of England governor Mark Carney.

The US will also release key inflation and retail sales figures later in the week, providing markets with more clues about the Fed’s plans for raising interest rates.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.3 percent at 22,441.24 (break)

Hong Kong – Hang Seng: DOWN 0.1 percent at 29,163.99

Shanghai – Composite: DOWN 0.4 percent at 3,433.11

Pound/dollar: UP at $1.3120 from $1.3116 at 2200 GMT

Euro/dollar: UP at $1.1671 from $1.1665

Dollar/yen: UP at 113.71 yen from 113.63 yen

Oil – West Texas Intermediate: DOWN five cents at $56.71 a barrel

Oil – Brent North Sea: DOWN six cents at $63.10

New York – DOW: UP 0.1 percent at 23,439.55 (close)

London – FTSE 100: DOWN 0.2 percent at 7,415.18 (close)

Copyright AFP (Agence France-Press), 2017

Source: Brecorder.com

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