Asian Markets Surge as Yuan Slides Further to Lowest Level

July 21, 2018
Asian Markets Surge as Yuan Slides Further to Lowest Level

By Investors Hub

Asian stocks closed mostly higher on Friday despite concerns that an escalation of trade tensions could harm global growth.

Chinese shares finished sharply higher, with the benchmark Shanghai Composite Index jumping 56.73 points or 2.1 percent to 2,829.27 after China’s central bank lowered its yuan midpoint for the seventh straight trading day.

Investors believe the yuan’s slide will cushion the impact on exporters from the planned next round of U.S. tariffs. Hong Kong’s Hang Seng Index climbed 213.62 points or 0.8 percent to 28,224.48.

Meanwhile, Japanese shares ended a choppy session lower after China allowed its currency to slide further to its lowest level in a year, stoking concerns that China could turn a trade war into a currency war.

The Nikkei 225 Index slid 66.80 points or 0.3 percent to 22,697.88, while the broader Topix Index closed 0.3 percent lower at 1,744.98.

Kobe Steel lost 2.3 percent after it was indicted by prosecutors for allegedly violating competition law. Tokyo Electron and Sumco tumbled 3-4 percent after Apple supplier TSMC trimmed its outlook for 2018 revenue.

Advertising firm Dentsu slumped 6.8 percent after its French rival Publicis Groupe reported a decline in revenue in the first half of 2018.

In economic news, Japanese consumer price inflation rose 0.7 percent year-on-year in June, the Ministry of Internal Affairs and Communications said. That was unchanged from the May reading, although it was shy of expectations for 0.8 percent.

Australian shares eked out modest gains as financials and healthcare stocks gained ground, offsetting losses in the mining sector.

The benchmark S&P/ASX 200 Index rose 23.20 points or 0.4 percent to 6,285.90, while the broader All Ordinaries Index ended up 22.40 points or 0.4 percent at 6,377.40.

The big four banks gained between half a percent and 0.7 percent, while vaccine and blood products firm CSL advanced 1.2 percent, benefiting from a weaker Aussie dollar.

Oil Search rose over 1 percent as its part-owned PNG LNG project signed a three-year gas supply deal with PetroChina. Santos climbed 2.5 percent and Origin Energy added 1.4 percent after crude oil prices rose 1 percent overnight.

On the other hand, miners BHP Billiton, South32 and Alumina shed 2-4 percent after commodity prices fell overnight on Chinese demand concerns.

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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