Asian Shares Drop as Trump Effect Fades
02 Dezember 2016 - 4:30AM
Dow Jones News
Asian shares were broadly lower Friday, tracking losses on Wall
Street, as equity markets indicate the 'Trump trade' could be
overdone.
The Nikkei Stock Average was down 0.5%, after closing at a
record high on Thursday. The S&P/ASX 200 was off 0.7%, the Hang
Seng Index in Hong Kong fell 0.8% and Korea's Kospi was 0.7%
lower.
"Globally, the Trump rally is starting to wane and that
sentiment is bleeding over into other markets," said Alex Furber, a
sales trader at CMC Markets. "Other concerns are coming into
play…so we're seeing a little bit of a pullback on overdone
optimism."
Investors have been betting that a Republican-led government
will slash taxes and regulation, which some expect could jump-start
growth and inflation.
On Thursday, the S&P 500 slipped 0.4%, and the tech-heavy
Nasdaq Composite fell 1.4% while the Dow Jones Industrial Average
rose 0.4%, to 19192, after posting in November its biggest monthly
gain since March. Asian stock markets tend to be most sensitive to
the S&P 500.
Financial stocks in particular have benefited from hopes that
their margins could rise, with Japan's Topix bank subsection
recently up 2.7%.
However, some traders have started asking if the market has
overestimated U.S. president-elect Donald Trump's impact on
inflation and U.S. growth.
Elsewhere, gains gleaned Thursday, from the landmark deal by the
Organization of the Petroleum Exporting Countries to cut
production, fizzled out for some producers as oil prices corrected
lower. In Australia, Oil Search and Woodside Petroleum fell 0.4%
and 1.8%, respectively. Brent, the global benchmark, was last down
0.8% at $53.49 a barrel.
"Ahead of the weekend, after such decent upward moves and with
the U.S. jobs data due out tonight coupled with the Italian
referendum, the street is happy to crystallize profit and take some
exposure off the table," said Gavin Parry, managing director of
Parry Trading International.
Aaron Kuriloff contributed to this article.
Write to Ese Erheriene at ese.erheriene@wsj.com
(END) Dow Jones Newswires
December 01, 2016 22:15 ET (03:15 GMT)
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