SINGAPORE, July 19 (Reuters) - Asian shares are set to
end the week on a sour note, as uncertainty across the
geopolitical landscape and in major economies added to headwinds
for investors even as the global rate easing cycle gets under
way.
It has been a turbulent week in markets, with a tech
sell-off sparked by deepening Sino-U.S. trade tensions,
uncertainty over U.S. President Joe Biden's fate in the
presidential race, disappointing Chinese economic data and a
lacklustre third plenum outcome casting a shadow over the global
mood.
In the foreign exchange market, Tokyo's recent bouts of
intervention also kept traders on edge.
"We could just be getting a taste of things to come. And
that is more turbulence," said Matt Simpson, senior market
analyst at City Index.
MSCI's broadest index of Asia-Pacific shares outside Japan
slid 0.1% and was headed for its worst week in
over a month with a 2.4% loss.
Japan's Nikkei fell to a more than two-week low and
was last down 0.1%, extending its sharp 2.4% fall from the
previous session.
The Nikkei looked set to end the week 2.7% lower, also its
steepest weekly decline in three months.
Technology stocks continued to struggle, with South Korea's
tech-heavy KOSPI index and Taiwan stocks both
easing more than 1%.
South Korean chipmaker SK Hynix ( HXSCF ) was last 0.7%
lower, though Japan's Tokyo Electron ( TOELF ), a chipmaking
equipment manufacturer, rebounded some 2.6%, after an 8.75%
tumble on Thursday.
Shares of Taiwan's TSMC, the world's largest
contract chipmaker, fell 1.3%, even after the company posted
better-than-expected earnings on Thursday and raised its
full-year revenue forecast.
In China, investors were left disappointed over the lack of
details provided on the implementation steps for achieving the
country's economic policy goals at the conclusion of its closely
watched plenum on Thursday.
Chinese blue-chips fell 0.08% in early trade,
while the Shanghai Composite Index edged 0.07% lower.
Hong Kong's Hang Seng index slid 1.5%.
"While more robust details are likely still forthcoming, we
interpret the initial communique as the third plenum failing to
deliver anything especially meaningful that would suggest
changes to the longer-term direction for the Chinese economy,"
said Brendan McKenna, international economist at Wells Fargo.
The onshore yuan opened a touch weaker at 7.2626
per dollar.
RATES FOCUS
The euro was last 0.02% lower at $1.0893, having
fallen 0.4% in the previous session after the European Central
Bank (ECB) kept rates on hold as expected but left the door open
to a September cut as it downgraded its view of the euro zone's
economic prospects.
"The policy statement gives little away, offering no
meaningful changes from June - continuing to stress a
data-dependent approach to policy setting," said Nick Rees, FX
market analyst at MonFX.
"We still think that a September cut remains the base case."
The dollar was meanwhile on the front foot, distancing
itself from a four-month low hit earlier in the week against a
basket of currencies.
Sterling dipped 0.03% to $1.2942, while the Australian
dollar fell 0.12% to $0.6698.
The dollar was underpinned by strong U.S. manufacturing data
and jobless figures that did little to suggest a significant
slowing in the labour market, though traders are still pricing
in a September rate cut from the Federal Reserve.
The yen was a touch firmer at 157.31, helped by
suspected bouts of intervention from Japanese authorities to
prop up the currency and as an acceleration in the country's
core inflation last month kept alive expectations that the Bank
of Japan could soon raise interest rates.
In commodities, oil prices fell, as mixed economic signals
weighed on investor sentiment.
Brent crude futures eased 0.58% to $84.62 a barrel,
while U.S. crude futures slid 0.81% to $82.15 per barrel.
Gold fell 0.8% to $2,425.19 an ounce, retreating from
a record high hit earlier this week on the prospect of lower
global interest rates.