Asian shares slipped in Wednesday trade, although recent worries over Turkey’s currency crisis moderated as the lira stabilized after its recent drop.
In Japan, the Nikkei 225 shed 0.44 percent after the last session’s near 500-point bounce. Most sectors traded lower in morning trade, with the oil and coal products sector leading losses as oil prices slipped, while financials and technology also recorded declines. Among heavyweights, SoftBank Group dropped 1.29 percent and Fast Retailing slipped 0.27 percent.
Australian stocks firmed through the morning, with the S&P/ASX 200 reversing early declines to drift higher by 0.05 percent. The heavily weighted financials sector, however, remained in negative territory, weighed down by Commonwealth Bank of Australia’s 3.37 percent fall amid an ongoing financial sector inquiry in the country.
Greater China markets all took a slight dip in early hours trade. The Shanghai Composite was around 0.7 percent lower, with most major insurers, such as Ping An Insurance Group, trading more than 1 percent lower.
Hong Kong’s Hang Seng Index traded close to 1.2 percent lower. That was a common story across most sectors, with Tencent extending losses, last trading lower by 3.3 percent. The drop in the tech giant came amid Tuesday’s news that it had pulled a video game from one of its platforms.
Markets in South Korea and India were closed on Wednesday.
The Turkish lira strengthened from a record low touched earlier this week, causing investor sentiment to firm overnight.
The lira was relatively stable at 6.3754 to the dollar at 9:54 a.m. HK/SIN, mostly holding onto overnight gains after firming 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 96.732, just below a 13-month peak of 96.794 on Tuesday. Against the yen, the dollar extended gains to trade at 111.33 at 9:55 a.m. HK/SIN.
On the earnings front, Tencent and China Unicom are among the corporates reporting results.
