Terror attack, Trump woes hit Asia bourses

A man walks past a stock quotation board flashing the current foreign exchange rate of the yen against the US dollar in Tokyo, on Aug 15, 2017.
A man walks past a stock quotation board flashing the current foreign exchange rate of the yen against the US dollar in Tokyo, on Aug 15, 2017.PHOTO: AFP

Tokyo shares the most affected with 1.18% drop, while STI ends 0.52% lower

Asian markets tumbled yesterday as news of the Barcelona terror attack ramped up the tension in an already fraught week.

Markets around the world had also been hit over the past week by the controversy over United States President Donald Trump's comments on violence that occurred during a white nationalist protest in Virginia.

Several business leaders resigned from his advisory councils - before Mr Trump then disbanded them - and a White House official said plans for a council on infrastructure had been dropped. This has cast doubt on whether his planned tax cuts and infrastructure spending will happen.

Tokyo shares were hit hardest, tumbling 1.18 per cent yesterday, with Hong Kong next, dropping 1.08 per cent. Sydney fell 0.56 per cent and Seoul dropped 0.14 per cent.

The Straits Times Index fell 16.89 points, or 0.52 per cent, while Shanghai ended just 0.01 per cent higher.

Mr Jim Reid, a strategist at Deutsche Bank, told clients in a note: "In a week where we started by worrying about nuclear war, markets have quickly moved on from this, with yesterday's weak session more of a response to fears that Mr Trump's strategy for the economy and business is falling apart and, later, the terrible terrorist attack in Barcelona."

RESPONSE TO FEARS

In a week where we started by worrying about nuclear war, markets have quickly moved on from this, with yesterday's weak session more of a response to fears that Mr Trump's strategy for the economy and business is falling apart and later, the terrible terrorist attack in Barcelona.

MR JIM REID, strategist at Deutsche Bank.

Mr Stephen Innes, head of Asia-Pacific trading at Oanda, told Reuters: "Diminishing West Wing support from both business and political allies will continue to abrade investors' confidence in President Trump's economic agenda." The US dollar, for the most part, "remains in a state of directionless confusion", supported by healthy US economic data, yet burdened by "the expanding White House rat's nest".

European markets also tumbled, with London, Paris and Madrid all down about 1 per cent at midday.

On Wall Street, US stocks opened marginally lower yesterday, a day after the S&P posted its biggest one-day percentage loss in about three months amid concerns over Mr Trump's ability to legislate his pro-growth agenda.

A version of this article appeared in the print edition of The Straits Times on August 19, 2017, with the headline 'Terror attack, Trump woes hit Asia bourses'. Print Edition | Subscribe