Asian shares pressured by emerging markets turmoil

TOKYO Tue Jan 28, 2014 5:18am IST

Pedestrians walk past an electronic board showing various stock prices, which are reflected in a polished stone surface, outside a brokerage in Tokyo January 24, 2014. REUTERS/Yuya Shino

Pedestrians walk past an electronic board showing various stock prices, which are reflected in a polished stone surface, outside a brokerage in Tokyo January 24, 2014.

Credit: Reuters/Yuya Shino

Related Topics

TOKYO (Reuters) - Asian shares were pinned near five-month lows on Tuesday as turmoil in emerging markets and concerns about an economic slowdown in China took their toll.

Disappointing guidance from Apple Inc AAPl.O also looks set to hit regional technology stocks.

The world's most valuable technology firm missed Wall Street's target for iPhone sales over the crucial holiday shopping season and offering a weaker-than-expected forecast for this quarter, sending its shares down more than 8 percent after the bell.

Japanese shares look set to extend losses further from a 2 1/2-month low hit on Monday.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2 percent to a five-month low, extending a 3.8 percent loss in the past three days.

Expectations that the U.S. Federal Reserve will scale back its bond buying further have put pressure on risk assets, especially emerging markets dependent on external financing as the Fed kicks off its two-day policy meeting later in the day.

Tighter credit conditions in China as Beijing seeks to curb growth in high-risk lending has added to the gloom, with investors worried that the world's second-largest economy could slow further.

The Turkish lira, which has been leading the rout in emerging currencies amid a corruption scandal that has rocked Prime Minister Tayyip Erdogan's government, rebounded from a record low after the central bank called an emergency meeting on Tuesday.

Turkey's central bank is expected to raise rates to defend the sagging lira after its decision not to do so last week had send the lira in a freefall. Its policy statement is due at 2200 GMT.

"The market is expecting a rate hike of one percent or more and possible capital controls. Whether their steps can calm markets is one big area of focus," said Masafumi Yamamoto, chief strategist at Praevidentia Strategy.

The lira stood at 2.282 to the dollar after after hitting a record low of 2.39.

The Indian central bank will be also holding a policy meeting later in the day, though the bank is expected to keep rates on hold.

The Indian rupee has softened over the past couple of days but has been spared the sort of sharp selloff that has pummelled the Turkish lira, the Brazilian real and South African rand.

Investors could also draw some comfort from the news that a Chinese trust firm had reached an agreement to resolve a troubled high-yield investment product, just days away from what could have been a precedent-setting default in China's shadow banking system.

Yet concerns over rapid expansion of China's shadow banking sector, a key source of financing for local corporations, could fester over the medium-term as China's economic growth is seen slowing.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

India-Nepal Ties

REUTERS SHOWCASE

Facebook Results

Facebook Results

Facebook beats Wall Street targets, stock hits record high  Full Article 

GM Recall

GM Recall

GM recalls 717,950 vehicles in U.S., not for ignition switches  Full Article 

Factory Sector

Factory Sector

China July HSBC flash PMI at 18-month high of 52.0   Full Article 

Breakingviews

Breakingviews

Apple winds up earnings hope for new gadgets  Full Article 

BRICS Bank

BRICS Bank

World Bank chief welcomes new BRICS development bank.  Full Article 

Streamlining Operations

Jet Streamlines

Jet Airways chairman says looking to restructure debts, talking to bankers  Full Article 

Political Economy

Political Economy

Analysis - Watch what markets don't do as world politics turns nasty   Full Article 

Honda's India Thrust

Honda's India Thrust

Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec   Full Article 

 Boosting Output

Boosting Output

NMDC plans to boost iron ore output by two-thirds  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage