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14 Aug 2018
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| Malaysia financial markets (The Total Investment & Insurance Solutions) |
Most global stock markets steadied Tuesday as worries subsided over
Turkey's currency crisis and its potential impact on other countries.
KEEPING SCORE: Germany's DAX rose 0.2 percent to 12,376 and France's CAC
40 was up less than 0.1 percent to 5,414 after economic growth figures for the
eurozone were revised up. London's FTSE 100 shed 0.2 percent to 7,628. On Wall
Street, futures for the Standard & Poor's 500 index and Dow Jones
industrial average were up 0.3 percent.
ASIA'S DAY: The Shanghai Composite Index lost 0.2 percent to 2,780.96
while Tokyo's Nikkei 225 added 2.3 percent to 22,356.08. Hong Kong's Hang Seng
declined 0.7 percent to 27,752.93 and Seoul's Kospi advanced 0.5 percent to
2,258.91. Sydney's S&P-ASX 200 advanced 0.8 percent to 6,299.60 and India's
Sensex added 0.6 percent to 33,751.22. Benchmarks in Taiwan, New Zealand and
Southeast Asia also advanced.
TURKISH TURMOIL: Turkey's lira stabilized near record lows amid hopes
that Turkey is in talks with the U.S. to ease tensions between the sides.
Turkey's central bank also earlier announced measures to help its banks, but
economists say that what's needed is an interest rate increase of several
percentage points. The lira is down over 40 percent this year as investors
question whether President Recep Tayyip Erdogan's government can cope with
problems including a diplomatic spat with Washington that has resulted in
higher U.S. tariffs. Erdogan has ruled out an interest rate hike, which can
slow economic growth, but analysts say one is urgently needed to stabilize the
currency.
CONTAGION FEARS: Emerging markets had fallen Monday on concern that
Turkey's turmoil could highlight similar problems in their economies. The
Argentine peso and India's rupee hit a record low against the dollar. But those
jitters eased somewhat later Tuesday.
ANALYST'S TAKE: Asian markets were "relatively more resilient"
to Turkey jitters than South Africa and Latin America were, said Philip Wee and
Radikha Rao of DBS Group in a report. But they said the U.S. tariff hike on
Turkish steel at a time of "considerable stress" tells emerging
economies not to expect Washington's help to calm their markets. "Expect
more stress if the Fed continues to look past the emerging market turmoil (like
it did in May) and keeps to gradual rate hike path," they said.
CHINA COOLING: Growth in factory output, consumer spending and retail
sales in July were weaker than expected, adding to signs of an economic
slowdown. Factory output rose 6 percent over a year earlier, in line with the
previous month but below forecasts. Retail sales gained 8.8 percent, down from
June's 9 percent. Investment in factories and other fixed assets grew 5.5
percent in the first seven months of the year, down from 5.7 percent in the
year to June. Forecasters have expected economic growth to decline since
regulators tightened lending controls last year to rein in surging debt.
ENERGY: Benchmark U.S. crude gained 89 cents to $68.09 per barrel in
electronic trading on the New York Mercantile Exchange. Brent crude, used to
price international oils, added $1.03 to $73.64 per barrel in London.
CURRENCY: The dollar gained to 110.81 yen from Monday's 110.73 yen. The euro
declined to $1.1406 from $1.1411.The
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