Asian stocks drift as G-20 meet leaves investors unimpressed

AP News
Posted: Feb 28, 2016 10:34 PM
Asian stocks drift as G-20 meet leaves investors unimpressed

HONG KONG (AP) — Asian markets were searching for cues Monday after finance officials from the world's biggest economies held a weekend meeting in China that ended without any specific pledges for joint action to stimulate sagging global economic growth.

KEEPING SCORE: Japan's benchmark added 0.4 percent to 16,245.47 and South Korea's Kospi dipped less than 0.1 percent to 1,921.25. Hong Kong's Hang Seng slid 1.0 percent to 19,176.39 while the Shanghai Composite Index tumbled 2.7 percent to 2,692.39 after Chinese officials guided the yuan sharply lower. Australia's S&P/ASX 200 rose 0.5 percent to 4,902.90.

SHANGHAI SUMMIT: Finance ministers and central bankers from the Group of 20 rich and developing countries promised at their meeting Saturday in Shanghai to use "all tools" at their disposal to bolster weak global growth, which is at its lowest level in two years. They also vowed not devalue their currencies to boost exports. They declared that the global economy is healthy, but also acknowledged they need to do more to boost its growth, without announcing any joint plan of action.

MARKET INSIGHT: "Following the optimism from traders on Friday ahead of the G-20 Summit, it looks like a case of the Monday morning blues after the influential group of ministers and bankers failed to come up with any concrete measures to boost growth," said Stephen Innes, senior foreign exchange trader at OANDA.

YUAN JITTERS: Chinese authorities guided the tightly controlled yuan sharply lower on Monday morning, in a move that sent the country's stock markets on another wild downward swing, taking the Shanghai benchmark down 4.4 percent in morning trading. Central bank officials weakened the yuan by more than 114 basis points to 6.5452 in their daily fix. Investors worry that sharp falls in China's currency signal Beijing's willingness to devalue the yuan further to prevent growth from slowing more than expected.

GLOBAL OUTLOOK: Investor sentiment is also cautious ahead of the release of a slew of economic data this week. Surveys of purchasing managers in the manufacturing and service sectors are due Tuesday for China, the U.S. and other countries in Asia and Europe.

WALL STREET: Major U.S. benchmarks finished a strong week on a flat note, with the Dow Jones industrial average closing down 0.3 percent to 16,639.97. The Standard & Poor's 500 index lost 0.2 percent to 1,948.05 and the Nasdaq composite added 0.2 percent to 4,590.47.

ENERGY: Benchmark U.S. crude oil rose 19 cents to $32.97 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 29 cents, or 1 percent, to settle at $32.78 a barrel on Friday. Brent crude, the global benchmark, rose 41 cents to $35.85.

CURRENCIES: The dollar fell to 113.39 yen from 113.98 yen in late trading Friday. The euro edged down to $1.0924 from $1.0932.