Stock Selling Eases in Asia Trade -- Update
June 28 2017 - 1:55AM
Dow Jones News
By Ese Erheriene
Stock selling eased in Asia Pacific Wednesday from the overnight
pace in the U.S. and Europe, where fears of monetary tightening by
the European Central Bank sent markets lower.
Citing signs of a strengthening recovery in the Eurozone, ECB
chief Mario Draghi hinted Tuesday that the bank may cautiously wind
down its stimulus.
"As the eurozone recovery continues to gather momentum, markets
are gradually turning their view to the growing likelihood of a
change in policy stance" by the ECB, said Rob Carnell, an economist
at ING.
Mr. Draghi's remarks sent equities and the dollar lower on
Tuesday, with the euro making its largest jump against the dollar
in a year.
Sovereign-debt yields also climbed, good news for the likes of
Japanese insurers, heavy buyers of such securities. Higher yields
help pay future claims. Dai-ichi Life and T&D Holdings each
rose about 1.5%.
The Nikkei Stock Average fell 0.3%--less than the overnight
declines in other major global indexes--and was about matched by
benchmarks in Korea and Hong Kong.
Taiwan's Taiex was off 1.1% as that tech-heavy market shook in
the wake of fresh selling in U.S. technology companies. Following
declines of nearly 2% by the likes of Alphabet, Microsoft and
Amazon, Taiwan's Catcher Technology, Wistron and Pegatron all fell
slightly more than 2%.
In Korea, the Kospi's IT subindex slid 1.8%.
OCBC expects selling pressure in tech to continue dominating the
agenda. More broadly, the investment bank said global equities were
hit "as Fed officials [appeared] coordinated in hinting that asset
valuations are looking elevated." Stocks have had a strong first
have, with nearly every major equities index globally higher.
Australia was again a regional outlier, this time to the good.
After notably underperforming of late, the S&P/ASX 200 was up
0.5%, helped by 2% gains in oil and metals companies as prices of
those commodities rebounded Tuesday.
Oil jumped 2% overnight to log its best gains in a month, and
though half that jump was erased following the release of downbeat
U.S. inventory estimates from an industry group, oil recovered some
in Asian trading.
Benchmark U.S. oil futures fell back below $43.70 a barrel on
the disclosure from the American Petroleum Institute but were
recently at $44.07, down 0.4% from Tuesday's settlement.
And as Asian sovereign-debt markets followed the overnight
selling caused by Mr. Draghi's comments, action was more muted in
Japan, where the central bank has an explicit yield target of zero
on 10-year bonds as part of its stimulative policy.
In Australia, the 10-year yield rose to 2.448% from 2.371% late
Tuesday, while Korea's 10-year climbed to 2.169% from 2.119%.
Write to Ese Erheriene at ese.erheriene@wsj.com
(END) Dow Jones Newswires
June 28, 2017 01:40 ET (05:40 GMT)
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