INGOT Brokers AU | Asian market report (2017-07-24)

Asian market report (2017-07-24)

Asian equity markets started the week in mixed territories pressured by the latest down trend in the dollar. Also, traders are now focusing on the upcoming two-day policy meeting from the Fed later in the week.

Ahead of the Fed's meeting, most traders don't expect the U.S. central bank to change the interest rates, but they said the market would look for any words that could give any sign of any further process of balance sheet shrinkage.

In the currency market, the dollar index, which measures the greenback against a basket of currencies, traded at 93.925, after reaching it lowest levels since June 2016 at 93.823.

Increasing political uncertainty from the White House led to extending the downward trend in the dollar after the surprising resignation of press secretary Sean Spicer who took this decision after the appointment of Anthony Scaramucci as a communications director by the President Donald Trump.

Still, in the political uncertainty, Mueller, a former FBI director, was named by the Justice Department in May to lead an investigation into Russian interference in last year's U.S. elections. Reports also suggested Trump is considering terminating Mueller and that the president was looking into the extent of his authority to issue pardons to aides, family members and even himself. Also, Trump's son-in-law and White House advisor, Jared Kushner, will be interviewed this week by the Senate Intelligence Committee in a closed session.

Moreover, Australia and Japan equity markets underperformed their peers as further declines in the U.S. dollar continued to weigh on investor sentiment.

Australia stock markets ended Monday’s trading session in red, falling 0.61 percent to close at 5,688.10 with most sectors ending lower especially the financials Subindex which closed down 0.77 percent as major banking shares remained under pressure. Shares of ANZ closed down 0.73 percent, Commonwealth Bank fell 0.48 percent, Westpac was lower by 0.77 percent, and the National Australia Bank slid 1.02 percent. 

Japan’s Nikkie index closed today’s trading session down by 0.8 percent to trade at 19,975.67. Among the biggest stock decliners in Japan were export-reliant companies, as is often the case when the yen strengthens since that eats into such firms’ earnings. Meanwhile, recent declines in bond yields hit insurers, which are large investors in fixed income. 

Beyond Japan and Australia, though, most indexes moved little from Friday’s closing levels, the Shanghai Composite reversed the downward trend to close up 12.5 points, or 0.39 percent, at 3,250.49. The Shenzhen composite reversed early losses to tack on 8.85 points, or 0.48 percent, to 1,854.66. In Hong Kong, the Hang Seng index traded up 0.45 percent in late afternoon trade.


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