Asian Shares Slide After U.S. Drop
September 11 2016 - 11:00PM
Dow Jones News
Asian shares started the week notably weaker as investor
anticipation continued to build regarding a pause in global central
banks' easing policies, which have helped prop up asset prices.
Emerging markets in Asia are particularly vulnerable to a rate
increase in the U.S., as better returns there could prompt a flight
of capital from less-developed locales. But some say strong growth
and the potential for earnings to pick up faster in Asia will
temper any sharp withdrawals.
After the biggest stock declines in the U.S. on Friday since the
initial post-Brexit drops, and following a summer devoid of
volatility there, Australia's S&P/ASX 200 traded nearly 2%
lower Monday morning after its biggest decline in five weeks on
Friday. Japan's Nikkei Stock Average was down 1.2%, and Korea's
Kospi dropped 1.5%.
Hong Kong's Hang Seng Index opened 2.4% lower after last week's
3.6% jump. The Shanghai Composite started down 1.6%.
"Friday's market adjustment to the possibility of higher rates
has continued in early Asian trade, with a sharp jump in Australian
bond yields and a weaker opening" in Asian oil trading, said CMC
Markets chief market analyst Ric Spooner.
Commodity names were outperforming to the downside in Australia,
with big miners BHP Billiton Ltd. and Rio Tinto Ltd. off 3.2% and
2.1%, respectively.
One bright spot Monday morning was Japanese life insurers,
gaining on expectations that their investments abroad would yield
higher returns. Dai-ichi Life Insurance Co. rose 1.5% and T&D
Holdings Inc. gained 1%.
Monday's selloff comes as investors in the U.S. on Friday sold
shares of high dividend-payers in utilities and telecoms—which have
been favorites as yield plays, given the low-rate environment.
Federal Reserve Bank of Boston President Eric Rosengren said
Friday "a reasonable case can be made" for tightening interest
rates to avoid overheating the economy.
Fed governor Lael Brainard is scheduled to speak Monday, a day
ahead of the blackout period on public comment that begins before
next week's FOMC meeting.
In the bond market, yields on 10-year Australian benchmark debt
hit 12-week highs Monday as investors bet on a higher rate
environment. Yields also rose on long-term Japan government bonds
amid lingering speculation that the Bank of Japan may begin pulling
back on its aggressive easing policies.
Robb M. Stewart, Hiroyuki Kachi and Kosaku Narioka contributed
to this article.
Write to Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
September 11, 2016 22:45 ET (02:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Rio Tinto (NYSE:RIO)
Historical Stock Chart
From Aug 2024 to Sep 2024
Rio Tinto (NYSE:RIO)
Historical Stock Chart
From Sep 2023 to Sep 2024