Economy
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.
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.
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.
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.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.16 per cent decline on Tuesday, January 21, extending its loss this week to two.
This further depleted the market capitalisation of the alternative stock exchange by N1.65 billion at the close of transactions to N1.071 trillion from the N1.073 trillion it closed in the preceding session.
In the same vein, the NASD Unlisted Security Index (NSI) slid by 4.79 points to wrap the session at 3,100.33 points compared with 3,105.12 points recorded in the previous session.
The bourse ended with two price losers yesterday led by Geo Fluids Plc, which gave up 32 Kobo to trade at N4.38 per share versus Monday’s closing price of N4.70 per share and FrieslandCampina Wamco Nigeria Plc, which depreciated by 15 Kobo to close at N39.50 per unit compared with the previous day’s N39.65 per unit.
On the second trading day of the week, the number of deal carried out slightly went up by 8.3 per cent to 13 deals from the 12 deals executed at the previous trading session.
Also, the value of transactions increased by 97.2 per cent to N4.5 million from the N2.5 million recorded a day earlier, while the volume of securities traded in the session declined by 71.6 per cent to 183,780 units from the 767,610 units recorded on Monday.
FrieslandCampina Wamco Nigeria Plc remained the most traded equity by value (year-to-date) with 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with 9.1 million units valued at N44.0 million, and 11 Plc with 55,358 sold for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume (year-to-date) with 25.3 million units worth N5.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units valued at N162.9 million.
By Adedapo Adesanya
Pressure further mounted on the Nigerian Naira in the different segments of the foreign exchange market on Tuesday, making its value to shrink against the United States Dollar at the close of business.
In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the domestic currency crashed against its American counterpart during the session by 0.18 per cent or N2.73 to settle at N1,552.78/$1, in contrast to Monday’s closing price of N1,550.05/1.
But against the Pound Sterling and the Euro, the local currency traded flat in the official market yesterday at N1,906.98/£1 and N1,613.48/€1, respectively.
As for the black market segment, the Naira weakened against the Dollar on Tuesday by N5 to sell for N1,670/$1 compared with the preceding day’s value of N1,665/$1.
Meanwhile, the cryptocurrency market heaved a sigh of relief during the session as President Donald Trump created a crypto task force dedicated to “developing a comprehensive and clear regulatory framework for crypto assets.”
The task force will be led by Commissioner Hester Peirce, a long-time advocate for the crypto industry, and will work closely with the crypto industry to develop regulations. This is after Mr Gary Gensler, an opponent of crypto, officially stepped down as chairman of the US Securities and Exchange Commission (SEC) after Mr Trump’s term started.
The task force will also work with Congress, providing “technical assistance” as it crafts crypto regulations.
Solana (SOL) recorded a 9.2 per cent growth to sell at $257.09, Dogecoin (DOGE) rose by 7.6 per cent to $0.36789, Ripple (XRP) added 4.0 per cent to finish at $3.18, and Bitcoin (BTC) increased by 3.7 per cent to $105,515.03.
Further, Binance Coin (BNB) appreciated by 2.8 per cent to close at $699.01, Cardano jumped by 2.1 per cent to trade at $0.9972, Ethereum (ETH) soared by 2.0 per cent to settle at $3,308.21, and Litecoin (LTC) went up by 1.5 per cent to end at $116.72, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
The price of the Brent crude oil grade went below the $80 mark on Tuesday after it shed 86 cents or 1.1 per cent to trade at $79.29 per barrel after the US President, Mr Donald Trump, signaled the possibility of his country boosting its oil production.
This move raised concerns of higher US output in a market widely expected to be oversupplied this year, with the US West Texas Intermediate (WTI) crude futures falling by $1.99 or 2.6 per cent during the session to $75.89 per barrel.
On his first day in office, the US President signed an executive order to unleash America’s energy by easing the barriers to oil and gas extraction and production and revoking a series of climate orders by former President Joe Biden.
As pledged in the campaign, the executive order follows the declaration of a national energy emergency.
The declaration includes measures to expedite energy infrastructure delivery, and emergency approvals by agencies “to facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources, including, but not limited to, on Federal lands.”
This will likely confirm expectations that the oil market will be oversupplied this year after weak economic activity and energy transition efforts weighed heavily on demand in top-consuming nations the US and China.
President Trump also said he was considering imposing 25 per cent tariffs on imports from Canada and Mexico from February 1, rather than on his first day in office as promised.
The delay helped ease concerns of an immediate tightening of the market among US refiners, many of which are geared to process the type of crude oil supplied by these countries.
The US Energy Information Administration (EIA) reiterated on Tuesday its expectations for oil prices to decline both this year and next.
On its part, the Organisation of the Petroleum Exporting Countries (OPEC) projects robust demand growth in the world both this year and next.
In 2025, OPEC says demand is set to grow by 1.4 million barrels per day leaving its projection unchanged from the December report.
However, losses were also limited after the US president said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.
Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea.
Yemen’s Houthis said on Monday they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.
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