Asian shares slipped in early Wednesday trade even as recent worries over Turkey’s currency crisis moderated on the lira’s overnight gains.
In Japan, the Nikkei 225 drifted lower by 0.09 percent in the morning after the last session’s near 500-point bounce. Technology stocks traded slightly lower in early trade, while miners, utilities and shipping stocks recorded gains.
Australian stocks also slipped, with the S&P/ASX 200 edging down by 0.32 percent. The heavily weighted financials sector, which was weighed down by Commonwealth Bank’s 3.37 percent fall, contributed to the benchmark’s overall decline.
Markets in South Korea and India will be closed on Wednesday.
Investor sentiment was firmer as the Turkish lira strengthened from a record low touched earlier this week.
The lira traded at 6.3726 to the dollar at 8:17 a.m. HK/SIN, mostly holding onto overnight gains after rising some 8 percent in the last session.
The lira’s recent steep fall, which saw it plunge to an all-time low of 7.24 earlier this week, was triggered by increased U.S.-Turkey tensions over the detention of an American pastor in Turkey, but weakness in the currency also came against the backdrop of economic issues faced by the country.
Overnight moves in the currency came as Turkey’s Finance Minister Berat Albayrak said Tuesday that the country would protect the lira, adding that he thought the currency would firm, Reuters said.
The “rebound in the lira gave European banks and other emerging markets some respite. However, it is fair to say that the saga is not over,” David Plank, head of Australian economics at ANZ, said in a note.
“The root cause of Turkey’s problems — a very large external deficit denominated in foreign currency – remains unaddressed by authorities … Investors will remain wary of possible contagion to the European banking system and will be keeping an eye on other countries with high levels of foreign-currency debt,” he added.
Amid the improvement in market sentiment, Turkish President Recep Erdogan refused to back down, calling for Turkey to “produce enough for ourselves” in a speech in which he urged his people to boycott U.S. electronics. “If they have iPhone, there is Samsung on the other side. And we have our own telephone brands,” he said.
Stocks stateside rose on Tuesday amid the general improvement in sentiment: The Dow Jones Industrial Average rose 0.45 percent, or 112.22 points, to close at 25,299.92 and the S&P 500 added 0.64 percent to end at 2,839.96, with both indexes gaining after four straight sessions of declines.
The dollar index, which tracks the greenback against six other currencies, last stood at 96.673, just below a 13-month peak of 96.794 on Tuesday. Against the yen, the dollar traded at 111.28 at 8:01 a.m. HK/SIN.
On the earnings front, Tencent and China Unicom are among the corporates reporting results.
Here’s the economic calendar for Wednesday (all times in HK/SIN):
- 9:30 a.m.: China house price index
- 12:00 p.m.: Indonesia trade data
