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Monday, February 17th, 2020

Asian stocks lower as U.S. tax passage fails to impress

by December 21, 2017 General

Kelvin Chan, The Associated Press</span>

Published Thursday, December 21, 2017 2:20AM EST

HONG KONG – Asian share markets were mixed Thursday after the final congressional approval of a sweeping U.S. tax revamp. Chinese markets advanced after leaders promised to increase imports and reduce risks in the country’s financial system amid slowing economic growth and pressure from trading partners to open its markets wider.

KEEPING SCORE: Japan’s benchmark Nikkei 225 lost 0.1 per cent to 22,866.10 and South Korea’s Kospi sank 1.6 per cent to 2,433.69. The Hang Seng in Hong Kong gained 0.5 per cent to 29,395.70 while the Shanghai Composite jumped 0.6 per cent to 3,307.75. Australia’s S&P/ASX 200 lost 0.3 per cent to 6,060.40.

TAX PASSAGE: The U.S. Congress passed President Donald Trump’s $1.5 trillion tax overhaul, which brings generous cuts for corporations and rich Americans. Trump boasted that it would provide “rocket fuel” for growth in the world’s biggest economy, though judging from the lacklustre reaction of stock markets, investors had priced in the news well ahead of time.

MARKET INSIGHT: “With the positive result of the votes largely expected, U.S. equity markets found little upsides, leaving Asian markets with little inspiration,” said Jingyi Pan, market strategist at IG in Singapore.

CHINA ECONOMY: The Central Economic Work Conference, led by President Xi Jinping, is a throwback to China’s era of central planning and plays an important role in setting development goals for the state-dominated economy. A statement issued after the three-day annual planning meeting contained no new initiatives and was in line with the ruling Communist Party’s plans to make the economy more efficient while also building up state industries.

JAPAN POLICY: The Bank of Japan kept its monetary policy unchanged at its final meeting for 2017, signalling it will rely on recovering growth to help drive inflation higher. The key policy rate remains at minus 0.1 per cent and massive asset purchases by the central bank are set to continue for as long as is needed to help attain a inflation target of 2 per cent. The BOJ said inflation expectations were still in a “weakening phase.”

WALL STREET: Major U.S. benchmarks ended little changed. The Standard & Poor’s 500 index lost 0.1 per cent to 2,679.25. The Dow Jones industrial average fell 0.1 per cent to 24,726.65. The Nasdaq composite slid less than 0.1 per cent to 6,960.96.

CURRENCIES: The dollar was slipped to 113.39 Japanese yen to 113.40 yen. The euro fell to $1.1868 from $1.1870.

ENERGY: Oil futures fell. Benchmark U.S. crude lost 3 cents to $58.06 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 53 cents to $58.09 a barrel on Wednesday. Brent crude, used to price international oils, slipped 9 cents to $64.47 a barrel in London.