Market Talk – Thursday, March 18

ASIA:

The US Commerce Department said on Wednesday that it has served subpoenas on multiple Chinese companies that provide information and communications technology services in the United States to see if they pose a national security risk. The subpoenas will gather information to “allow us to make a determination for possible action that best protects the security of American companies, American workers, and US national security,” Commerce Secretary Gina Raimondo said in a statement. The statement did not name any companies. The Commerce Department issued an interim final rule in the final days of the Trump administration aimed at addressing information and communications technology supply chain concerns and said it would become effective after a 60-day period of public comment. The US Chamber of Commerce and groups representing major industries raised concerns in a letter to the Commerce Department in January that the interim rule gave the government “nearly unlimited authority to intervene in virtually any commercial transaction between US companies and their foreign counterparts that involves technology.

DBS Group economist’s report suggests India’s central bank may have to delay the start of monetary policy normalization by three months amid rising COVID-19 cases, but barring the return of stringent lockdowns, there is no significant threat to the economy’s recovery. DBS has retained its assumptions for a stronger pick-up in March quarter growth versus the December 2020 quarter and expects a double-digit rebound in the fiscal year 2021/22. Though analysts are unlikely to rush to review their long-term growth forecasts, several believe policy normalization on interest rates and liquidity, may now take a backseat.

Japanese exports fell much faster than expected in February as US and China-bound shipments weakened. This could be a source of concern for the world’s third-largest economy as it tries to prop up growth. Ministry of Finance data out on Wednesday showed Japanese exports fell 4.5% year-on-year in February, hurt by a decline in US-bound shipments of automobiles. It was the first decline in three months, following a 6.4% gain in January. It was also much bigger than a 0.8% drop expected by economists in a Reuters poll. U.S.-bound shipments, another key export market for Japanese goods, declined 14.0% year-on-year in February, dragged down by automobiles, airplane parts, and motors, after a 4.8% drop in the prior month and posting a fourth straight month of declines.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 302.42 points or 1.01% to 30,216.75
  • Shanghai increased 17.52 points or 0.51% to 3,463.07
  • Hang Seng increased 371.60 points or 1.28% to 29,405.72
  • ASX 200 decreased 49.30 points or -0.73% to 6,745.90
  • Kospi increased 18.51 points or 0.61% to 3,066.01
  • SENSEX decreased 585.10 points or -1.17% to 49,216.52
  • Nifty50 decreased 163.45 points or -1.11% to 14,557.85
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