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Asian Shares Down as Tax Reform Plan Weigh on Investor Sentiment

By Investors Hub

Asian markets ended mostly lower on Friday, with uncertainty about the outlook for the Republican tax reform plan weighing on investor sentiment.

Regional economic data did help a few markets early on in the session, but the mood turned cautious as the day progressed.

Despite the country’s Tankan survey showing an improvement in business confidence, the Japanese market ended lower, extending losses to a fourth consecutive session, with stocks from banking and insurance sectors posting notable losses. The Nikkei 225 Index ended down 141.23 points or 0.6 percent, at 22,553.22.

Among the prominent losers, KDDI Corp. declined 6.6 percent. Rakuten Inc., Nippon Telegraph & Telephone Corp, NTT Docomo, Tokyo Gas and Tosoh Corp. shed 4 to 5.5 percent.

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Nippon Yusen, Credit Saison, Sumitomo Corp., Softbank Corp., Sojitz and Resona Holdings also declined sharply.

Meanwhile, Tokai Carbon turned in a fine performance and gained about 15.3 percent. Showa Denko KK jumped nearly 12 percent.

Tokyo Dome added about 5 percent. Pioneer Corp., Comsys Holdings, Nippon Suisan Kaisha, Sumco Corp., Dainippon Screen Manufacturing, Yaskawa Electric Corp., Nippon Light Metal Holdings, Tokyo Electron and NEC also posted strong gains.

The closely watched Tankan survey from Bank of Japan showed that confidence among large Japanese manufacturers increased for the fifth straight quarter to an 11-year high at the end of 2017, as strong exports and rising corporate profits underpinned activity.

The large manufacturers’ sentiment index rose to 25 from 22 a quarter ago, according to the quarterly Tankan survey from Bank of Japan. This was the highest score since the end of 2006. At the same time, the large non-manufacturers’ sentiment indicator held steady at 23 in the fourth quarter.

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However, both big manufactures and non-manufacturers forecast conditions to weaken in the next quarter. The outlook index among manufacturers came in at 19 and that in non-manufacturing at 20.

The Australian market recovered after a flat start, but failed to hold gains and eventually ended slightly lower. The benchmark S&P/ASX 200 index declined 14.30 points or 0.2 percent to 5,997.00. The broader All Ordinaries Index ended down 9.30 points or 0.2 percent at 6087.10.

HT&E declined more than 7 percent. Retail Food Group ended 4.6 percent down. Macquarie Atlas Roads, Flexigroup, Fairfax Media, JB Hi-Fi, Sigma Pharma, Alumina, Sirtex Medical, CSR and Whitehaven Coal ended lower by 2 to 4 percent.

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Bank of Queensland, Bendigo & Adelaide Bank, Commonwealth Bank of Australia and ANZ Bank all closed in the red, losing 0.6 to 1 percent.

Among the gainers, Transurban Group added 4.8 percent and Mayne Pharma advanced nearly 4 percent. Crown, Oz Minerals, Rea Group and Altium gained 3 to 3.3 percent. Mineral Resources, Healthscope, Seven West Medi, Saracen Mineral Holdings, Webjet and Caltex Australia also rose sharply.

Among other markets in the Asia-Pacific region, Hong Kong, Shanghai, Malaysia, Indonesia and Taiwan ended lower, with their benchmark indices losing between 0.4 and 0.9 percent.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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