Asian Stocks Rise Despite Prospect of Stronger Protectionist Measures
SINGAPORE stocks rose on Wednesday (Nov 13), even as the region braces itself for a new US administration that could implement stronger protectionist measures.
The Straits Times Index (STI) rose 0.2 per cent or 8.86 points to 3,720.34. Across the broader market, losers beat gainers 315 to 257, after 1.2 billion shares worth S$1.2 billion changed hands.
Asian Markets Mixed
Other Asian markets were in the red. Hong Kong’s Hang Seng Index shed 0.1 per cent, while Japan’s Nikkei 225 fell 1.7 per cent and South Korea’s Kospi declined 2.6 per cent.
Protectionist Concerns
SPI Asset Management managing partner Stephen Innes said that Asian stocks appear to be “rattled” by the prospect of fresh trade tariffs that could be implemented by the incoming Trump administration.
“With China hawks primed for top roles in his administration and China’s booming trade surplus flashing bright red, the market is bracing for a resurgence of protectionist policies,” he noted.
He added that investors have been paying close attention to the Chinese yuan, which has been depreciating against the US dollar. In particular, he is watching for whether the US dollar/Chinese yuan rate will cross 7.25.
“Cross that line, and it’s not just the yuan that gets shaky – global markets could feel the aftershocks, stoking fears of capital flight and sending tremors through the currency landscape. The People’s Bank of China’s daily fix might look subtle, but it’s anything but trivial,” he said.
Local Market Performance
On the STI, Thai Beverage was the top gainer. It rose 2 per cent or S$0.01 to S$0.52. Frasers Logistics and Commercial Trust was at the bottom of the table, shedding 3 per cent or S$0.03 to S$0.97. The counter began trading ex-distribution on Wednesday.
The trio of local banks were mixed on Wednesday. DBS gained 1 per cent or S$0.44 to S$42.78, while OCBC gained 0.6 per cent or S$0.09 to S$16.26. UOB fell 0.1 per cent or S$0.03 to S$35.50.
Conclusion
Despite the uncertainty surrounding the incoming US administration, Asian stocks remained relatively stable on Wednesday, with the STI rising 0.2 per cent. However, the prospect of stronger protectionist measures and a depreciating Chinese yuan could continue to affect market sentiment in the coming days.
FAQs
Q: What is the current outlook for Asian stocks?
A: Asian stocks are expected to remain volatile due to the uncertainty surrounding the incoming US administration and potential protectionist measures.
Q: What is the impact of a depreciating Chinese yuan on global markets?
A: A depreciating Chinese yuan could lead to increased concerns about capital flight and global market instability.
Q: What is the role of the People’s Bank of China in the global currency landscape?
A: The People’s Bank of China plays a crucial role in setting the daily fix for the Chinese yuan, which has significant implications for global currency markets.
Q: Will the STI continue to rise?
A: The STI could continue to rise or fall depending on various factors, including global market sentiment and the impact of protectionist measures.
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