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Asian stock markets are retreating as political turmoil in the US leads to growing concern

TOKYO (Reuters) – Asian equity markets declined again on Wednesday, taking a course that began last week as US political uncertainty fueled concerns over slowing global economic growth.

FILE PHOTO: Men look at stock prices before a brokerage in Tokyo (Japan), December 5, 201

8. REUTERS / Issei Kato

Investors were aware of the partial closure of the US federal government and the hostile US stance President Donald Trump to the US government worries Federal Reserve Chairman.

US. Treasury Secretary Steven Mnuchin also expressed concern about the market given the weakening of equities.

S & P 500 Emini futures fell 0.6 percent lately. This suggests a slower start for Wall Street when the US market reopens after Christmas, when many of the world's financial markets were closed.

The markets in the UK, Germany and France remain closed on Wednesday.

MSCI's broadest index for Asia-Pacific outside Japan fell 0.5 percent, marking a 2-month low.

The Shanghai Composite Index lost 0.4 percent, while the KOSPI in South Korea lost 1.6 percent.

Japan's Nikkei, which had plummeted 5 percent the previous day, had an erratic meeting. He went into the red and fell more than 1 percent to a 20-month low before ending the day with a 0.9 percent gain.

"In addition to the concerns of the US economy, markets must now deal with the growing turmoil in the White House, which has increased policy risk before the end of the year," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

US. Stocks have fallen sharply in recent weeks amid concerns about weaker economic growth. Trump has largely blamed the US Federal Reserve for the economic headwind and openly criticized its appointed chairman, Jerome Powell.

That shook investors further as they grappled with worries about global growth, corporate profits and US-Chinese trading tensions.

To reassure investors, Minister of Finance Mnuchin spoke on Sunday to the heads of the six largest US banks, who confirmed that they had sufficient liquidity for further lending and that "markets continue to function properly."

Ultimately, we believe the Fed is the only presence able to end the current market confusion, "said Kenta Inoue, senior market economist at Mitsubishi UFJ Morgan Stanley Securities, in a statement.

"The White House is likely to continue making gestures to stop stock market recovery, but the federal government is likely to remain closed until the new year. The trade war between the US and China also shows no signs of a solution. "

US. Bond yields fell in the wake of the recovery, including a strong sell-off in the oil sector, prompting investors to go into safe government bonds, fueling growing pressure on the dollar.

The dollar traded at 110.35 yen, having fallen overnight against its Japanese peer to a four-month low of 110.00. This tends to attract demand as a safe haven in times of market volatility and economic stress.

The Euro rose 0.15 percent to $ 1.1412. 10-year US Treasury yields rose to 2.722 percent, the lowest level since early April.

In commodities, US crude oil futures rose 0.4 percent to $ 42.70 a barrel, down 6.7 percent on Monday.

US. Crude futures fell to their lowest level since June 2017 on Monday, as bearish equities fueled fears of a slowdown. [O/R]

Brent crude futures declined 0.18% to $ 50.38 a barrel, down 6.2% from August 2017 in the previous session.

Safe haven gold was well bid and spot prices hit a six-month high of $ 1,272.83 per ounce. [GOL/]

Edited by Shri Navaratnam and Richard Borsuk

Our Standards: The Thomson Reuters Trust Principles.

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