Global Markets: Asian shares lower as investors book decade-end profits
Investors
Asiansharesslipped on the last trading day of thedecade, echoing falls on Wall Street, asinvestorslocked in gains made since the United States and China reached a preliminary trade deal earlier this month.
Early in theAsiantrading session, MSCI's broadest index of Asia-Pacificsharesoutside Japan was down 0.39 per cent, its weakest performance since December4. For the month, the index is still up 5.7 per cent.
The index has gained 16 per centthis year, a sharp turnaround from a 16.2 per cent drop last year but lagging a 23.8 per cent year-to-date gain in MSCI'sglobalshare index.
Australianshareswere 1.69 per centlowerand Hong Kong's Hang Seng dropped 0.32 per cent.
"We are seeing some profit-taking into year-end," said Ryan Felsman, senior economist at CommSec in Sydney, adding that progress on resolving the 17-month-long US-China trade war remained a positive factor forinvestorsinto the new year.
The White House's trade adviser on Monday said the US-China Phase 1 trade deal would likely be signed in the next week, but said confirmation would come from President Donald Trump or the USTrade Representative.
"We think that theglobalgrowth situation is improving, we're seeing better industrialprofitsin China ... green shoots in the manufacturing sector on the back of an improvement in the trade situation is a key catalyst going forward," he said.
While easing trade concerns and steps toward a resolution of Britain's exit from the European Union have helped reduce some near-term market uncertainty,investorsremain uneasy with a recession seen as inevitable in the newdecade.
Positive Chinese manufacturing data, which showed factory activity in China expanded for a second straight month in December, nudged China's blue-chip CSI300 index 0.1 per centhigher, extending the more than 33 per centgain seen this year.
China's modest gains built on Monday's rally, which was driven by a combination of strong retail sales growth and hopes that a new benchmark for floating-rate loans couldlowerborrowing costs.
Marketsin Japan and South Korea were closed for a holiday.
The falls in Asia came after profit-taking pushed the Dow Jones Industrial Average down 0.64 per centto 28,462.14, the S&P 500 0.58 per centlowerto 3,221.29 and the Nasdaq Composite off 0.67 per centto 8,945.99.
USTreasury futures werelower, reflecting an implied yield of 1.82 per cent. That followed a rise in benchmark USTreasury yields on Monday that pushed the UStwo-year, 10-year yield curve to its steepest in 14 months.
The dollar continued to weaken against the yen, dropping 0.12 per centto 108.73, and the euro strengthened 0.16% to buy $1.1215.
The dollar index, which tracks the greenback against a basket of six major rivals, was 0.06 per centlowerat 96.686.
UScrude dipped 0.18 per centto $61.57 a barrel and Brent crude shed 0.15 per centto $66.57 per barrel.
Gold continued its rally on a weakening dollar. On the spot market, the precious metal was changing hands at $1,520.16 per ounce, up 0.33 per cent.