Asia Stocks Fall on Concern Trump Will Pursue Isolationist Path

  • Region’s shares fall most in six weeks, tracking U.S. equities
  • Markets seen pricing in risk of anti-globalization policies

BOJ Stands Pat: Was It the Right Move?

Asian shares fell the most in six weeks, tracking losses in U.S. equities, on concern U.S. President Donald Trump will pursue isolationist policies and slow global growth.

Consumer discretionary and technology stocks were the biggest drag on the MSCI Asia Pacific Index, with all 11 industry groups retreating except real estate shares. U.S. stocks fell the most this year on fears Trump’s immigration ban signals he may follow through with isolationist policies touted on the campaign trail, overshadowing a pro-growth agenda. Japanese shares extended declines to a second day, falling the most since Nov. 9, after the Bank of Japan kept stimulus unchanged and the yen strengthened. Markets in Hong Kong, China and Vietnam are closed for Lunar New Year holidays.

“Markets are still pricing in the risk of more anti-globalization policies that will come from the U.S., a direction that’s set by Trump’s travel ban,” says Rafael Palma Gil, fund manager at Rizal Commercial Banking Corp. “Given the risks and valuation, investors are opting to take profit and hold cash.”

The MSCI Asia-Pacific Index is trading at 13.6 times 12-month estimated earnings, compared with its five-year average of 12.7 times. The gauge is heading for a 4.5 percent gain in January, poised for the best month since July.

Summary

  • MXAP -0.9% at 3:45 p.m. in Hong Kong, halting 4-day rally
  • NEC -17%, biggest decline since Sept. 1974; co. slashed full-year oper. profit forecast by 70%
  • Sony -2.3%; co. takes $1b writedown in movie business
  • Hokuriku Electric -10%; co. cuts dividend forecast
  • Kia Motors -3.6%; slower growth in domestic demand, slower U.S. sales will make it difficult for co. earnings to rebound by 1H 2017: Dongbu Securities
  • Cheil Worldwide +9.1%; co.’s 4Q earnings beat estimates, rating raised to buy from hold at Dongbu
  • Stanley Electric +5.5%; co.’s nine-month operating profit +8.9% y/y
  • Bharti Infratel -13%; stock rating cut to outperform from buy, price target lowered 21% at CLSA
  • Topix -1.4%, Nikkei 225 -1.7% in Tokyo; yen +0.1%
  • Australia’s S&P/ASX 200 Index -0.7%; New Zealand’s S&P/NZX 50 Index -0.5%
  • Kospi -0.8%; India’s Sensex -0.4%; Philippine Stock Exchange Index -1.5%
  • Jakarta Composite Index +0.2; KLCI Index -0.7%; SET Index -0.6%

For more news:
Oil Braces for Trump Ban Fallout, Halliburton Says Stay Put
Trump Fires Acting Attorney General Who Defied Immigration Ban
Japan Shares Fall as Trump Ban Dims Optimism on Future Policies
European Debt Crisis Memories Rattle Markets, Defy Confidence
India’s Sensex Drops Second Day After Best Week in Eight Months

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