Most Asian Stocks are Weakening – US Influence
Most Asian stocks are weakening – Asian emerging market shares fell on Thursday. Investors were wary of more risky assets because of the influence of U.S. Federal Reserve policymakers. This strengthened the dollar and encouraged bets on rapidly rising interest rates. Shares in South Korea have fallen since the country’s central bank raised interest rates for the second time since the pandemic. At the same time, the inflation forecast for 2022 was updated, strengthening the expectations for further tightening the policy. Shares in Seoul fell 0.5%, while Shanghai and Singapore fell 0.1% -0.7%.
Backed by the dollar, several Fed politicians said that they would be prepared to speed up the bond-buying program if inflation remained high. This means a faster transition to raising interest rates.
In emerging Asian markets, currencies have come under pressure in recent sessions. The Fed supports the dollar exchange rate, although the yuan continues to support the region’s currencies. Traders say demand for the yuan is strong. Companies are trying to convert their dollar income into local currency. In South Korea, the Monetary Policy Council of the Central Bank raised the policy interest rate by 25 basis points to a total of 1.00%.
Asian Holding Plans
The Bank of Korea should continue its policy tightening cycle, and rates will reach 1.50% by 2022. Therefore, this raises concerns about whether households will be able to repay their debts. Profit weakened by 0.3%. Maybank analysts say long-term price pressures could mean a steady path to rate tightening; however, the pace of tightening needs to be carefully defined.
Kaisa Group Holdings Ltd wants to extend the $400 million bond by a year and a half. This will be part of an effort to avoid default and resolve the liquidity crisis. Shares of the delayed developer, which resumed trading after being suspended on November 5, rose to 23.8%.
South Korean Shares
South Korean stocks closed lower. The country’s central bank has raised key policy rates to fight inflation and household debt. KOSPI was down 14.02 points, or 0.47 percent, and closed at a total of 2980.27 points.
The volume of trade was moderate. Five hundred eighty-seven million shares were worth $7.8 billion. The losers outnumbered the winners by 642 to 228. According to an analyst at Kiwoom Securities, BOK’s decision is downward pressure on the stock market.
Samsung Electronics experienced a market decline of 1.47 percent. SK Hynix fell 1.67 percent. At the same time, Internet portal operator Naver increased by 0.51 percent. Kakao rose 2.81 percent. Kakao Bank grew by 4.95 percent. Moreover, Kakao Pay increased by 18.31 percent and reached a record high.
Tokyo shares resumed on Thursday. Investors gained high-tech stocks and other excessive sales after a sharp drop the previous day.
The Nikkei Stock Average finished with 196.62 points and reimbursed part of the 1.58 percent drop from the previous day. The Topix index of the first section of the Tokyo Stock Exchange finished with 6.57 points. According to the strategist of Mitsubishi UFJ Morgan Stanley Securities Co., because the shares were excessive the day before, some hedge funds bought the undervalued shares.
The mood has improved amid long-term growth in U.S. Treasury revenues. The yield on high bonds makes risky stocks less attractive. The attention of a large part of the market players is now on the Organization of the Petroleum Exporting Countries and the Allies, which is expected on December 2.
As for technology issues – Sumco increased by 0.5 percent. Tokyo Electron rose 0.6 percent. Problems of automakers with weak yen removal, which increases overseas income during repatriation. Subaru grew by 1.3 percent. The volume of trading on the main section fell from 1,221.87 million shares to 959.84 million shares.