Asian Stocks Drop as Japan Equities Slide Before Trump Speech

  • Topix index declined for third day as investors shun risk
  • MSCI regional benchmark valuations hovering at July 2015 level

How Trump's Speech to Congress May Impact Markets

Asian stocks retreated for a second day as Japanese equities slipped for a third day ahead of an address by U.S. President Donald Trump that may give details of his spending and tax plans.

The MSCI AC Asia Pacific Index dropped 0.6 percent as of 4:34 p.m. in Hong Kong. The gauge is trading at 13.7 times its 12-month forward earnings, near the highest level since July 2015. Japan’s Topix fell a third day with banks and exporters leading declines, while the yen was little changed after gaining 1.4 percent in three sessions through Friday.

“Markets are likely to focus on President Donald Trump’s upcoming address,” IG Asia Pte Ltd. market strategist Jingyi Pan wrote in an e-mail.

Trump is scheduled to speak to Congress on Tuesday and will unveil details of his budget plans, which seek to produce long-term economic growth by slashing taxes, Treasury Secretary Steven Mnuchin said.

Hong Kong’s Hang Seng Index closed 0.2 percent lower, failing to overcome 24,000 -- a key resistance level that the benchmark has struggled to breach over the past seven years. Cnooc Ltd. led declines by energy producers, while Hong Kong Exchanges & Clearing Ltd. fell after reporting lower profit. The Hang Seng China Enterprises Index of mainland Chinese stocks slid 0.8 percent.

KB Financial Group Inc. slid 3.9 percent in Seoul, leading a drop in South Korean banks as investors took profit after recent good performances, according to Michael Na, analyst at Nomura Financial Investment Korea. Retail Food Group Ltd. fell 6.7 percent in Sydney after increased spending and lower expectations for its outlets prompted UBS Group AG analyst Jordan Rogers to cut earnings estimates.

SUMMARY

  • Japan’s Topix -1%, Nikkei -0.9%
    • Yen little changed at about 112.18 per dollar
    • Mitsubishi UFJ Financial -2.6%, SoftBank Group -2.4%, Sumitomo Mitsui -2%; Tokio Marine -3.1%
    • Totenko +2.9%; nearby Ueno Zoo announced giant pandas mated, fueling optimism of renewed tourism in the area
  • Hang Seng Index -0.2%, HSCEI -0.8%, Shanghai Composite -0.8%
    • HSBC -0.9%, China Construction -0.8%, Hong Kong Exchange & Clearing -1.3%
  • Kospi -0.4%
    • Samsung Electronics -0.4%, SK Hynix -3.2%
    • Samsung SDI +1.6%, company said completed supplying batteries to U.S. client
  • ASX 200 -0.3%
    • Retail Food -6.7%
  • Singapore’s Straits Times Index -0.3%; Jakarta Stock Exchange Composite Index -0.1%, Thailand’s SET Index -0.2%, Malaysia’s KLCI Index -0.1%, Philippines Stock Exchange PSEi Index -0.4%, India’s S&P BSE Sensex Index +0.2%
    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE