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Asian Markets at Close Report

European Markets at Close Report

Jan 23, 2017

Asian Markets at Close Report on January 23, 2017: Nikkei Falls as Other Asian Markets Make Gains

marketwatch.com

Willa Plank



Asian stocks generally rose Monday, but action still had much the same feel of the past two weeks — continued widespread investor caution about getting overly aggressive on the buying side as Donald Trump becomes U.S. president.


That was highlighted by Hong Kong’s Hang Seng index HSI, +0.06%  , which rose nearly 1% within the first hour of trading but soon thereafter was back to even on the day and hugged the flat line the rest of the session. It finished up 0.1%.

Meanwhile, Japanese equities were a noted laggard as the yen USDJPY, -1.01%  led broad currency gains versus the dollar; the WSJ Dollar index BUXX, -0.53%  was down 0.5%.

“People are still waiting to see the rabbit out of the hat,” said Andrew Sullivan, managing director of sales trading at Haitong International Securities, about the new administration and its policies. “Until we see the rabbit, we won’t believe in the magic.”

The Nikkei NIK, -1.29%  closed 1.3% lower, with exporters reacting as typical when the Japanese currency rises. Auto suppliers Renesas Electronics 6723, -2.80%  and Nippon 4612, -2.45%  fell more than 2%. Insurers also lagged as global sovereign-debt yields declined, pressuring investment holdings. Both Dai-ichi Life 8750, -1.70%  and T&D 8795, -1.74%  were down 1.7%

Takata Corp. shares fell sharply for a third straight day Monday as investors rushed to sell ahead of a possible bankruptcy filing for the company, which faces a potential multibillion-dollar bill for recalls related to its faulty air bags. The company’s share price closed down 18% at 467 yen, the third consecutive day of double-digit decline. Trading volume was thin as buyers of the stock were scarce, accelerating the declines.

The other major regional stock index to fall was Australia’s S&P/ASX 200 XJO, -0.77%  . It dropped 0.8% to notch a sixth decline in eight sessions. But Chris Weston, chief market strategist at IG, called the selling there a healthy pullback within a bull market.
The industrials sector had the sharpest decline there Monday, weighed down by Brambles BXB, -15.80%  . The logistics company slumped 16% — its biggest one-day drop since 2002 — after the logistics company warned profit growth may fall short of expectations this year due to headwinds facing its North American pallets business.
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The CEO of Gamco Investors sees two infrastructure plays for the Trump economy, plus a beverage company and a cheap broadcaster.

Elsewhere, the color was green for Asian stocks after some recent bouts of profit-taking.
Following Friday’s gains, the Shanghai Composite SHCOMP, +0.44%   was up 0.4% and the Shenzhen Composite 399106, +0.87%   climbed 0.9% as China’s central bank added temporary liquidity to the system ahead of the Lunar New Year.

Taiwan’s Taiex benchmark Y9999, +0.99%   gained 1% and New Zealand’s NZX-50 finished up 0.3%.

The market is still relatively hopeful about U.S. fiscal spending, said Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets. “I also think we always have to be wary how much can one man do.”

In addition, Moltke-Leth sees the potential for some upgrades of Chinese equities. “There is a lot of momentum in China,” pointing to Friday’s generally upbeat economic data.