Asian stocks head for fourth weekly fall after yuan devalues
TOKYO, Aug 14 — Asian stocks headed for a fourth weekly decline as investors weighed the impact of China’s devaluation and the timing of a US interest rate increase.
The MSCI Asia Pacific Index fell less than 0.1 per cent to 138.35 as of 9.08am in Tokyo, heading for a 1.9 per cent decline this week. Global markets, jolted when China unexpectedly devalued its currency, calmed yesterday after the People’s Bank of China said it supports a strong, stable yuan. US retail sales added to signs the world’s largest economy is strengthening, and raised expectations the Federal Reserve may raise rates next month.
“As yuan concerns dissipates, there’s probably room for a short-term rebound in the markets,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which oversees about US$118 billion (RM475 billion) said by phone. “It’s hard to imagine sustainable gains given the prospects of the Fed raising rates next month.”
Japan’s Topix index slid 0.2 per cent. Australia’s S&P/ASX 200 Index gained less than 0.1 per cent. New Zealand’s NZX 50 Index rose 0.3 per cent.
Markets in Hong Kong and China have yet to start trading. The Shanghai Composite Index climbed 1.8 per cent yesterday while the Hang Seng China Enterprises Index of mainland companies in Hong Kong and the city’s benchmark Hang Seng Index both gained 0.4 percent.
The Shanghai Composite has fallen 23 per cent from its June peak amid concern the nation’s economic slowdown is deepening. Data this month showed producer prices slid in July to the lowest level since 2009 and overseas shipments dropped more than expected. Industrial production and retail sales also missed forecasts last month, according to reports on Wednesday.
The offshore-traded yuan gained 0.1 per cent to 6.4597 per dollar in early Friday trading, after rallying 0.9 per cent in the previous session.
Futures on the Standard & Poor’s 500 Index fell 0.1 per cent. The underlying index slipped 0.1 per cent yesterday. — Bloomberg
