Morning Report

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Wednesday, 15 August 2018

Asian stocks retreat as Turkey worries weigh, dollar buoyant

Asian stocks retreated on Wednesday, failing to follow Wall Street’s gains, while the dollar was near a 13-month high as concerns about Turkey’s financial crisis weighed on investor appetite despite the lira’s move away from an all-time low.

The lira, which plummeted to a record low of 7.24 to the dollar at the week’s start, rattling global markets, was slightly weaker at 6.415 after rebounding more than 8 percent overnight.

Wall Street’s three main indexes rose on Tuesday as the lira’s climb eased fears of broader financial contagion for now. But the rise in U.S. shares did not carry through to Asia. Hong Kong’s Hang Seng dropped more than 1 percent and the Shanghai Composite Index fell 0.1 percent. Australian stocks rose 0.1 percent and Japan’s Nikkei slipped 0.4 percent after rallying more than 2 percent on Tuesday.

Underscoring lingering concerns over the crisis in Turkey, the dollar hovered near a 13-month peak against a basket of currencies, supported by its safe-haven status.The dollar index, which measures the greenback’s strength against a group of six major currencies stretched overnight gains and reached 96.82, its highest since late June 2017.

The benchmark 10-year Treasury note yield  stood around 2.89 percent, having bounced from a three-week low of 2.848 percent set on Monday.Yields on British gilts and French bonds have also pulled away from multi-week lows.

Crude oil prices felt pressure from a stronger dollar, which increases the cost burden on non-U.S. buyers of commodities.Brent crude futures  dipped 0.2 percent to $72.31 a barrel and U.S. crude shed 0.35 percent to $66.81 a barrel.

Source : Reuters