ASIA MARKETS: Shanghai Index Loses Yearly Gain But Other Asian Stocks Rise Modestly
By Kevin Kingsbury and Gregor Stuart Hunter
Nikkei climbs; China's trade surplus narrows
Asian stocks vacillated Thursday but largely finished higher as some of the week's slump was unwound.
Japanese stocks were lifted and Hong Kong stocks turned higher but Shanghai's stock benchmark fell and turned negative for the year as large-cap stocks declined.
In Japan, Bank of Japan Gov. Haruhiko Kuroda, while declining to discuss future monetary-policy action, renewed his pledge to continue the central bank's easy policy (https://www.wsj.com/articles/bojs-kuroda-says-it-is-too-early-to-discuss-exit-strategy-1518077875)
In China, economic data showed the country's trade surplus narrowed sharply in January (http://www.marketwatch.com/story/china-foreign-trade-accelerates-in-january-2018-02-08) as imports surged. But analysts again warned that Chinese economic numbers are distorted at the start of each year by the timing of the Lunar New Year holiday.
The volatility of the past week was inevitable, given the lull that had preceded it, said Tai Hui, chief market strategist for Asia at J.P. Morgan Funds.
"I'm surprised that people were surprised," he said, while calling the past week's stock pullback "somewhat overdue." Hui is recommending that clients buy stocks in expectation of further gains.
Other analysts were more tempered.
"We think that it is too soon to sound the all-clear," Capital Economics said in a research note. "Our expectation is that unbridled optimism will give way to growing pessimism as it becomes clear that the U.S. economy will slow in response to tighter Fed policy and fading fiscal stimulus."
After strong European gains on Wednesday were followed by a late-day selloff in the U.S (http://www.marketwatch.com/story/dow-poised-to-slide-give-up-chunk-of-rally-2018-02-07)., the Shanghai Composite was among the notable movers on Thursday in Asia. It dropped 1.4%, wiping away the rest of this year's gains.
Coming into today, the index was among the few in Asia still up for 2018. That group still includes Hong Kong's Hang Seng , which is up 1.8% this year. On Thursday, the index rose 0.4%.
Japan's Nikkei climbed 1.1% on Thursday, and South Korea's Kopsi picked up 0.5%.
Australia's benchmark and Singapore rose 0.2% and 1%, respectively, Taiwan's index fell 0.2%.
Meanwhile, the yield on 10-year Treasurys fell to 2.81% from 2.84% after congressional leaders said they had reached an agreement on a two-year budget deal. Bond yields fall when prices rise.
In regional economic news, Japan reported its biggest current-account surplus since 2007 for last year. The yen remained steady compared to Wednesday levels versus the dollar as the greenback was broadly little changed.
But New Zealand's dollar fell 0.5% to a one-month low against the U.S. currency, even as the country's central bank met expectations by standing pat on interest rates (http://www.marketwatch.com/story/new-zealands-rbnz-leaves-rates-on-hold-2018-02-08), as some viewed the policy statement as slightly dovish.
(END) Dow Jones Newswires
February 08, 2018 05:15 ET (10:15 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.