Asia stocks slip as stronger dollar weighs on crude oil prices
Asian stocks were mostly lower on Friday as the dollar climbed to seven-month
highs against a basket of currencies and dragged down crude oil prices, cooling
investor risk appetite.
The greenback was boosted by a fall in the euro after the European Central
Bank shot down talk it was contemplating tapering its monetary easing – sending
the common currency to its lowest since March.
broadest index of Asia-Pacific shares outside Japan was down 0.3 per cent.South
Korea’s Kospi lost
0.4 per cent and Australian stocks shed 0.1 per cent, weighed down by a retreat
in energy shares. Singapore fell 0.4 per cent while Shanghai added 0.3 per
Japan’s Nikkei rose 0.3 per cent , brushing a six-month high, as the yen
weakened against the dollar.
U.S. stocks ended a choppy session on Thursday slightly lower as investors
digested the latest round of earnings, with a sharp drop in telecoms offset by
gains in health care.
The ECB left its ultra-loose monetary policy unchanged on Thursday but kept
the door open to more stimulus in December, with ECB President Mario Draghi dousing recent market speculation that the
central bank may begin tapering its 1.7 trillion euro asset-buying program.
“The European Central Bank removed a source of immediate risk for traders by
revealing that it did not discuss tapering its QE program at this month’s
meeting,” wrote Ric Spooner, chief market analyst at CMC Markets.
“Decisions are being deferred until December pending the outcome of research
– meaning that meeting will be a key focus for markets.”
The dollar index touched 98.541, its highest since early March.
The euro was down 0.3 per cent at $1.0902 after seeing a seven-month trough
The dollar was up 0.2 per cent at 104.145 yen adding to overnight gains of
0.5 per cent.
Sterling slipped 0.1 per cent to $1.2237, taking in stride comments by
European Council President Donald Tusk that British Prime Minister Theresa May
had confirmed that Brexit talks
would be triggered by end-March 2017.
China’s offshore yuan fell to its lowest level in six years against the
broadly stronger dollar.
U.S. crude futures were down 0.4 per cent at $50.41 a barrel. The contract
lost more than 2 per cent on Thursday as the dollar’s surge prompted
profit-taking on a rally that sent U.S. crude to 15-month highs midweek. Brent
crude lost 0.3 per cent to $51.22 a barrel.
A stronger greenback tends to increase the purchase cost for non-U.S. buyers
of commodities like crude oil and gold, which are denominated in the dollar.
Spot gold was down 0.2 per cent at $1,263.50 an ounce, although it was on
track for a 1 per cent gain on the week.
- Nikkei 225, Japan
- Shanghai Composite, China
- Hang Seng, Hong Kong
- Dow Jones Industrials
- NASDAQ NMS COMPOSITE INDEX
- S&P 500 INDEX
- Updated October 20 4:10 PM HKT. Delayed by at least 15 minutes.