Export-focused Japanese shares fall as yen gains on Afghan tension
08:38, 16 August 2021
Japanese shares led losses in the Asia-Pacific region on Monday, due to weakness among export-focused companies as the safe-haven Japanese yen rose following geopolitical developments in Afghanistan over the weekend.
COVID-19 worries added to the risk-off sentiment after the nation extended its coronavirus restrictions until mid-September.
The benchmark Nikkei 225 index fell 1.6% to 27,523 points on Monday, with global companies including Sony Group and Toyota Motor Corporation falling over 1.5% each. The yen was up 0.3% against the dollar on Monday afternoon.
“Geopolitical tensions fuel runs for safety”
“Normally, geopolitical tensions fuel runs for safety and benefit the safe-haven USD, JPY and CHF,” ING said. “For now, those developments are likely exacerbating an already fragile risk appetite, and indeed the JPY and USD have started the week on the front foot.”
The Topix-17 Automobiles & Transportation Equipment index, which is comprised of auto exporters including Suzuki Motor, Honda Motor and Nissan Motor, fell 1.8% on Monday.
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Aussie shares fall from record high
Australian shares also slipped from record highs on Monday, as investors turned risk-averse after a surge in COVID-19 infections forced Melbourne to extend lockdown by two more weeks.
Earnings results and merger reports failed to lift the S&P/ASX 200 index, which declined 0.6% to 7,582.50 points. The benchmark index had closed at a record high of 7,628.9 points on Friday.
ASX-listed shares of global miner BHP Group gave up early gains to trade 1.4% lower after the company announced a possible merger between its entire petroleum business and Woodside Petroleum. Share of Woodside Petroleum dropped 4.6%.
Sydney Airport fell 0.7% after rejecting an improved takeover bid from a consortium of infrastructure investors, while O&G firm Beach Energy tumbled about 10% after reporting a drop in full-year profits.
China shares seesaw
China’s blue-chip CSI 300 index seesawed on Monday after the world’s second-largest economy reported slowing factory and retail growth numbers for July.
“These data are worrying, but a virus hit was coming and we think the fundamentals, beyond the current Delta variant concerns, are strong,” said Pantheon Macroeconomics of China’s July retail sales growth, which disappointed market expectations.
Neighbouring market Hong Kong fell over 1%, in line with mainland Chinese shares, as internet companies Tencent and Meituan led losses ahead of their earnings due later this week.
Malaysian PM resigns
Malaysian shares fell 0.5% as the country’s prime minister Muhyiddin Yassin and his cabinet handed in their resignations on Monday.
Rising unemployment, slowing economic growth and a worsening coronavirus situation had put the former Prime Minister under pressure.
The country’s benchmark FTSE Bursa Malaysia KLCI Index loss of 7.5% in 2021, as of last close, summarising the nation’s poor economic performance.
Indonesia falls 1%
Meanwhile, Indonesian shares fell 1% as the government unveiled its budget proposal for 2022.
Thai shares were unchanged after the country posted better-than-expected GDP numbers for the second quarter, while Philippine shares rebounded strongly to jump 3% higher on Monday.
The stock market in Seoul was closed for a national holiday.
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Read more : China factory output and retail data point to weaker economy
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