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GLOBAL MARKETS-Asian shares falter, dollar at 16-month peak on Europe, Brexit woes

Published 2018-11-12, 07:05 p/m
Updated 2018-11-12, 07:10 p/m
© Reuters.  GLOBAL MARKETS-Asian shares falter, dollar at 16-month peak on Europe, Brexit woes

* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* MSCI ex-Japan off 0.4 pct, Australia, NZ open sharply down

* Investors focus on Trump-Xi meeting late Nov

* Euro break key chart support of $1.13 to lowest since mid-2017

* Dollar benefits from euro, pound sell-off, U.S. rate hike bets

By Swati Pandey

SYDNEY, Nov 13 (Reuters) - Asian shares stumbled on Tuesday after a rout in tech stocks inflicted a hefty sell-off on Wall Street, while the dollar hit a 16-month peak on safe haven bets amid political risks in Europe and acrimonious Sino-U.S. trade relations.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.4 percent to a 1-1/2 week trough, with Australian and New Zealand shares opening sharply lower. .AXJO .NZ50

The Asia ex-Japan index is down 15.5 percent so far this year, after a solid 33.5 percent gain in 2017, with October the worst month since mid-2015.

Concerns about a slowdown in China and the Asian region more broadly due to U.S. tariffs on Chinese goods had spooked investors, sparking the largest monthly foreign outflows from Asia last month since August 2011, said Khoon Goh, Singapore-based head of Asia research for ANZ Banking Group.

Funds returned over the early part of November on hopes that U.S.-China tensions would ease, Goh added, with the focus squarely on a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping later this month.

"The outcome of the meeting will have an important influence on portfolio flows in Asia into the end of the year," Goh added.

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Worryingly, the Trump administration is broadening its China trade battle beyond tariffs with a plan to use export controls, indictments and other tools to counter the theft of intellectual property, the Wall Street Journal reported citing sources.

Asian markets have also been hammered as risk assets have been hurt by rising U.S. interest rates.

Overnight in Wall Street, major U.S. stock indexes dropped more than 1 percent, with the tech-heavy Nasdaq slumping over 2 percent. Indexes were weighed down by a 4.3 percent slump in index heavyweight Apple AAPL.O , after three iPhone parts suppliers issued warning on results. Europe, fears about a no-deal Brexit and a growing rift over Italy's budget hit the euro and the pound, pushing the dollar's index .DXY to 97.64 against a basket of currencies, a level not seen seen mid 2017. greenback also strengthened on bets the U.S. Federal Reserve will increase interest rates next month. FEDWATCH

The Fed's San Francisco President Mary Daly said on Monday the U.S. central bank should continue to raise rates gradually with her "modal" forecast showing two to three rate hikes over the next period of time. euro EUR= was last at $1.12 after breaking below important chart support of $1.13.

Sterling GBP= fell to $1.285 after three straight sessions of losses took it to the lowest since Nov.1 as there were still considerable unresolved issues with the European Union over Brexit, British Prime Minister Theresa May said on Monday. prices fell again after declining for a record 11th consecutive session amid softening demand and as Trump said he hoped there would be no oil output reductions. crude CLc1 fell 82 cents to $59.11 a barrel. Brent crude futures LCOc1 slipped $1.20 to $68.97.

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Spot gold was a tad firmer at $1,201.4 XAU= .

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https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

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