Source: AFP
Most Asian markets fell on Friday after a generally healthy week, with traders hoping for fresh Chinese moves to help the country’s struggling property sector after officials called on banks to provide support.
Wall Street was closed for the Thanksgiving break, meaning investors got few catalysts to drive markets, while oil took center stage after OPEC’s decision to delay a key meeting sent prices lower.
Stocks have risen in recent weeks on optimism that the Federal Reserve will not raise interest rates again this cycle as inflation heads south and the economy shows signs of easing without sparking recession worries.
And while minutes from the bank’s most recent policy meeting echoed warnings from policymakers that borrowing costs are likely to remain high for some time, there is hope they will ease in 2024.
However, with investors taking a breather, many markets fell in Asia on Friday.
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Hong Kong led the losses, gaining on the week, while Shanghai, Seoul, Singapore and Manila were also lower.
Tokyo jumped as traders there played catch-up with an advance in Asia on Thursday. Sydney, Taipei, Jakarta and Wellington rose higher.
Investors are watching China after authorities called on banks to bail out the beleaguered property sector, which is a huge part of the world’s second-largest economy.
Parliament on Wednesday published a report calling on lenders to do more for the industry, with the head of the People’s Bank of China saying they should step up aid to establish “guaranteed delivery of buildings”.
Bloomberg later reported that he was also weighing a plan that would allow banks to offer developers unsecured loans for the first time.
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This followed a report that a draft list of companies eligible for bank support had been drawn up.
The moves suggest the government is attacking a debt crisis that threatens to destroy some of the country’s biggest property companies, including Evergrande and Country Garden, and hit the economy.
“The property developer’s debt issue will be resolved sooner or later,” said Jian Shi Cortesi, of GAM Investment Management.
“If this measure (on unsecured loans) is not enough, we will see more support next time.”
May Zhao, at Zhongtai Financial International, also expressed hope that Beijing is moving to tackle the crisis, saying the latest moves “would be powerful to break the vicious cycle of widespread defaults and prevent the spread of systemic risks.”
Oil prices were mixed after a two-day slide that came in the wake of OPEC’s decision to postpone a crucial meeting by four days due to a dispute over production quotas.
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Saudi Arabia and Russia earlier this year announced cuts of a million barrels a day until 2024 to support prices, and there were expectations that Riyadh planned to extend prices or even cut further.
However, African countries are said to be pushing back, fueling the standoff.
The declines came as prices continued to fall – about 16% from their September high – on rising non-OPEC supplies, a rebound in US inventories and easing concerns over the Israel-Hamas war.
“In light of the recent increase in US and non-OPEC production, this is likely to ruffle a few feathers as many of the smaller OPEC members are likely looking to increase quotas,” said Stephen Innes, of SPI Asset Management.
Keys around 02:30 GMT
Tokyo – Nikkei 225: UP 0.8 percent at 33,715.55 (break)
Hong Kong – Hang Seng: Down 1.6 percent to 17,632.26
Shanghai Composite: DOWN 0.3 percent at 3,053.10
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West Texas Intermediate: DOWN 0.5% to $76.73 a barrel
Brent North Sea crude: UP 0.4 percent at $81.55 a barrel
Dollar/yen: DOWN at 149.56 yen from 149.62 yen on Thursday
EUR/USD: DOWN to $1.0896 from $1.0905
GBP/USD: DOWN to $1.2526 from $1.2531
Euro/pound: DOWN to 86.98 pence from 87.03 pence
London – FTSE 100: UP 0.2 per cent at 7,483.58 (close)
New York – DOW: Closed due to holidays
Source: AFP