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Asia markets track Wall Street lower

Thursday 02.20 GMT

Overview

Asian markets tracked Wall Street lower on Thursday after Donald Trump’s tax reform proposals failed to excite US investors.

Hot topic

The S&P 500 closed down 0.1 per cent on Wednesday after Mr Trump outlined plans for a reduction in the corporate tax rate from 35 per cent to 15 per cent, and offered a one-time tax cut on overseas profits to encourage companies to repatriate profits held outside the US.

In Asia, Japan’s Topix index was off 0.2 per cent with Tokyo-based messaging app Line falling as much as 10 per cent after the company missed operating profit estimates.

In Sydney the S&P/ASX 200 was flat with the energy sector falling 2.3 per cent as Santos and Origin Energy tumbled after Australia announced gas export restrictions. Santos fell as much as 7.7 per cent and Origin slipped as much as 3.6 per cent.

Hong Kong’s Hang Seng index was down 0.2 per cent. A single bright spot was the financial sector, which was up 0.3 per cent as insurer AIA rose 5.4 per cent after reporting a 53 per cent year-on-year jump in new business for the first quarter.

The Shanghai Composite and Shenzhen Composite were down 0.6 per cent and 0.8 per cent respectively.

Forex

The dollar index measuring the greenback against a basket of peers was down 0.1 per cent after climbing 0.3 per cent on Wednesday.

Japan’s yen was 0.2 per cent weaker at ¥111.25 per dollar ahead of the Bank of Japan’s interest rate decision on Thursday, with the central bank expected to keep its policy on hold.

The South Korean won was 0.5 per cent weaker at Won1,130.60 per dollar. Nonetheless, data released by the Bank of Korea on Thursday showed that the country’s gross domestic product expanded 0.9 per cent in the three months to March quarter-on-quarter.

Fixed income

The yield on US 10-year Treasuries rose 1 basis point to 2.311 per cent after slipping 2bp on Wednesday.

Commodities

Oil prices fell following the release of data from the Energy Information Administration that showed US inventories of crude fell by a larger than expected 3.6m barrels in the week to April 21. Analysts are looking for further signs that Opec’s production cuts are having a tightening effect on the market.

International benchmark Brent was down 0.4 per cent at $51.61 a barrel, while US benchmark West Texas Intermediate fell 0.5 per cent to $49.37 a barrel.

Gold was 0.2 per cent weaker at $1,266 per troy ounce.

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