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

REUTERS SHOWCASE

Scotland Referendum

Scotland Referendum

Scots vote in record numbers, await independence verdict.  Full Article 

India-US Diplomacy

India-US Diplomacy

Obama to nominate Indian-American Richard Verma as India ambassador - congressional source.  Full Article 

GMR in Nepal

GMR in Nepal

Nepal clears India’s GMR plan for $1.4 bln hydroelectric plant.  Full Article 

LIC on Markets

LIC on Markets

LIC chairman bullish on Indian markets  Full Article 

India Rains

India Rains

Monsoon rains weaken as late retreat looms.  Full Article 

Ellison Quits

Ellison Quits

Oracle's Ellison steps aside, co-CEOs Catz and Hurd take over.  Full Article 

Infosys-Huawei

Infosys-Huawei

Infosys partners with China's Huawei for cloud-based services  Full Article 

Gold Outlook

Gold Outlook

Gold imports seen up, premiums likely to double on festive buying  Full Article 

Trade Dispute

Trade Dispute

U.S. to press India on trade row during Modi's Washington visit  Full Article 

Reuters India Mobile

Reuters India Mobile

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