Asian Stocks Stumble as Turkey’s Lira Falls Again

August 16, 2018
Asian Stocks Stumble as Turkey's Lira Falls Again

By Investors Hub

Asian stocks closed mostly lower on Wednesday, with Chinese and Hong Kong markets pacing the declines as Turkey?s lira resumed its decline after rebounding more than 8 percent against the dollar overnight.

Turkish President Recep Erdogan threatened to boycott U.S. electronic goods, including Apple’s iPhone device, retaliating in a dispute with Washington that has contributed to the lira?s plunge to record lows.

Chinese shares fell sharply to close just off their 2018 lows as investors fretted about Turkey?s future and the spillover of the crisis to other emerging markets.

The benchmark Shanghai Composite Index plunged 57.71 points or 2.1 percent to 2,723.36, while Hong Kong’s Hang Seng Index slumped 429.34 points or 1.6 percent to 27,323.59.

Japanese shares fell on profit taking after sharp gains in the previous session. The Nikkei 225 Index shed 151.86 points or 0.7 percent to finish at 22,204.22 after spiking by 2.3 percent in the previous session, its biggest single-day gain since March. The broader Topix index closed 0.8 percent lower at 1,698.03.

Heavyweights SoftBank Group and Fanuc Corp gave up 2.6 percent and 1.8 percent, respectively, while exporters Canon, Panasonic and Honda Motor fell more than 1 percent.

Gaming stocks fell across the board after Chinese regulators froze approval of game licenses amid a government shake-up. Nintendo, Square Enix and Capcom all lost around 3 percent.

Meanwhile, Australian shares closed higher as CSL and Wesfarmers posted strong gains. The benchmark S&P/ASX 200 Index rose 29.40 points or 0.5 percent to 6,329 and the broader All Ordinaries Index ended up 29.50 points or 0.5 percent at 6,415.70.

Blood products giant CSL soared 6.4 percent. The company raised its dividend after reporting a 29 percent jump in full-year net profit, thanks to strong sales in the United States.

Wesfarmers rallied 3.2 percent despite the company reporting a sharp drop in full-year profits due to $1.41 billion in discontinued operations and $300 million in write-downs.

Lender Commonwealth Bank fell 2.5 percent on going ex-dividend, while the other three banks rose between 0.8 percent and 1.7 percent.

On the other hand, insurer Insurance Australia Group slumped 5.8 percent after its annual profit fell slightly due to a drop in investment income and a higher tax bill. Suncorp Group shares tumbled 3 percent.

A decrease in base metal prices pulled down mining stocks, with Rio Tinto, South32, Alumina and Fortescue Metals Group falling 1-4 percent.

Oil & gas explorer Woodside Petroleum slid half a percent despite the company reporting a 6 percent rise in net profit and raising its 2018 production outlook.

Media firm Fairfax Media dropped 1.7 percent as it reported a full-year net loss on lower revenues and one-time charges.

In economic news, the latest survey from Westpac Bank revealed that consumer confidence in Australia ebbed in August, sinking 2.3 percent to a score of 103.6 after a 3.9 percent jump in July.

Dipo Olowookere

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.

Mr Olowookere can be reached via [email protected]

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