Home / Business / Most Asian stocks rise, but Taiwan fears linger

Most Asian stocks rise, but Taiwan fears linger

n United States House Speaker Nancy Pelosi waves to journalists upon her arrival at Taiwan’s parliament in Taipei on Wednesday, Aug. 3, 2022. AFP PHOTOUnited States House Speaker Nancy Pelosi waves to journalists upon her arrival at Taiwan’s parliament in Taipei on Wednesday, Aug. 3, 2022. AFP PHOTO 

HONG KONG: Most Asian markets climbed on Wednesday after reversing the previous day’s losses, though traders remained on edge after United States House Speaker Nancy Pelosi’s visit to Taiwan, which has further strained ties between Washington and Beijing, and raised concerns about its long-term impact on the global outlook.

The highest-profile trip to the East Asian island by an American politician in 25 years was met with condemnation from China, which warned of serious economic and military consequences.

Taiwan said more than 20 Chinese military aircraft had flown into the island’s air defense identification zone, an area wider than its territorial airspace that overlaps with part of China’s air defense zone. Beijing’s People’s Liberation Army was also due to conduct a series of drills, while Foreign Minister Wang Yi vowed to “punish” those who offended the country.

China said it would suspend imports of some citrus fruits and fish from Taiwan over alleged “repeated” detection of excessive pesticide residue and positive coronavirus tests on packages, while exports of natural sand were also halted, with no details provided.

Taiwanese leader Tsai Ing-wen struck a defiant tone at her meeting with Pelosi, saying the island “will not back down. We will… continue to hold the line of defense for democracy.”

with an email address, I acknowledge that I have read and agree to the Terms of Service and Privacy Policy.

At the event, Pelosi said her delegation “came to Taiwan to make unequivocally clear we will not abandon our commitment to Taiwan.”

No one expected it would spark a conflict, but the crisis sent shivers through trading floors that were already on edge over a range of issues including the war in Ukraine, surging inflation, rising interest rates and slowing economic growth.

However, Asia enjoyed a small recovery, though some markets pared morning gains.

Hong Kong, Taipei, Tokyo, Singapore, Seoul, Wellington, Jakarta and Manila all rose, though Shanghai, Mumbai, Sydney and Bangkok edged down.

London, Paris and Frankfurt all fell at the open.

The “short-term implication may be ‘sell the rumor, buy the news’ as the official response so far remains much more restrained versus what the market has feared,” Xiadong Bao of Edmond de Rothschild Asset Management said.

“But the mid/long-term implication can be more significant, which may be currently overlooked by the market. The official return of the US influence in Asia-Pacific will inevitably accelerate US-China decoupling.”

Analysts are also keen to find out what the White House’s response will be, particularly ahead of midterm elections in November with anti-China rhetoric playing well with voters, but with US President Joe Biden keen not to further harm economic ties.

SPI Asset Management’s Stephen Innes said the Biden administration was not likely to cut Trump-era tariffs before then.

The broadly positive performance in Asia followed a drop on Wall Street, where the Taiwan tensions were compounded by a series of hawkish comments from Federal Reserve (Fed) officials indicating bigger interest rate hikes could still be in the pipeline.

Stocks rallied last week and Treasury yields dropped after Fed Chairman Jerome Powell hinted that the US central bank could begin slowing down, but the latest remarks suggest a hoped-for dovish pivot might not be coming just yet as inflation remains stubbornly high.

“This round of Fed speak suggests markets might be a little too optimistic in pricing in a Fed pivot and that rate cut calls for next year are too optimistic,” Oanda’s Edward Moya said.

The latest developments have raised concerns that the volatility on markets would probably continue for some time.

“It’s hard to see any meaningful upside in equities right now,” Xi Qiao of the UBS Group said.

“The market is going to trade pretty mixed, stay choppy until we have a little bit more certainty,” she told Bloomberg News.

*****
Credit belongs to : www.manilatimes.net

Check Also

CAVITEX C5 Link adjusts toll on Sunday, Nov 27

Cavitex Infrastructure Corporation (CIC) will collect adjusted toll rates at the Manila–Cavite Expressway (CAVITEX) effective …