Asian shares find their feet, but Shanghai rout continues

“The (US share) market is now about 7% off of its 100-day high, but this is far from a rare occurrence historically,” economists at RBC Capital Markets wrote in a research note.

“Indeed, history is littered with over 5%-ish type selloffs in the midst of economic expansions,” they said.

S&P 500 futures rebounded 0.6% in Asian trade on Friday, in part helped by media reports that the US treasury will not call China a currency manipulator in its upcoming semiannual report.

However, Chinese trade figures on Friday showed its trade surplus with the US hit a record high in September, providing a likely source of contention with US President Donald Trump over trade policies and the currency.

The data showed solid expansion in China’s overall imports and exports, suggesting little damage from the tit-for-tat tariffs with the US.

The CBOE volatility index rose on Thursday to its highest close since February 12, pointing to investors concern of further losses in markets.

“There still appears to be downside risk to the market amid worries the Sino-US trade war may be slowing down global growth,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

So far this week, Chinese and US shares are among the worst performers in a sign that investors’ concern about the trade war is deepening.

MSCI’s US index has shed 5.5%, compared with a 4.9% fall for MSCI’s gauge of stock performance in 47 countries.

Gold, typically seen as a safe-haven asset at times of high uncertainty, held steady on Friday.

It fetched $1,221.9 an ounce, keeping its 2.5% gain from Thursday, which was its biggest percentage rise since June 2016.

The yield on 10-year U.S. notes edged up 3.6 basis points in Asia to 3.167%.

It is still off its seven-year high of 3.261% touched on Tuesday, but a further rise in US borrowing costs could hurt risk sentiment.

Source: businesslive.co.za