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GLOBAL MARKETS-Stocks hit by U.S. fiscal fears, weak yen lifts Nikkei

by on November 15, 2012 12:32 am BST
 

Wed Nov 14, 2012 7:32pm EST

* MSCI Asia ex-Japan down 0.5 pct, Nikkei up 0.6 pct on
weaker yen

* Euro steady around $1.2730, dollar at 80.17 yen

* Middle East tensions support oil

By Alex Richardson

SINGAPORE, Nov 15 (Reuters) – Asian stocks mostly fell on
Thursday, taking their lead from a drop in Wall Street shares as
investors reacted to the prospect of drawn-out negotiations to
avert the looming U.S. “fiscal cliff” by shedding riskier
assets.

The retreat from risk also weighed on commodities, with the
exception of oil, which jumped in the previous session due to
rising tensions in the Middle East after Israel launched an
offensive against Palestinian militants in Gaza.

MSCI’s broadest index of Asia Pacific shares outside Japan
fell 0.5 percent. But Tokyo’s Nikkei rose 0.6
percent as the lift given to exporters by a sharp fall in the
yen the previous day outweighed global concerns.

“U.S. stocks fell, and there are concerns about the
developing situation in Israel, so sentiment is cautious and the
outlook is cloudy and unclear,” said Kenichi Hirano, operating
officer at Tachibana Securities in Tokyo.

U.S. stocks fell more than 1 percent on Wednesday after
President Barack Obama reiterated his call for the wealthy to
pay higher taxes, setting the stage for a tough budget battle
with Congressional Republicans.

Investors fear that the package of tax increases and
spending cuts mandated to come into force next year if a deal is
not agreed – the so-called fiscal cliff – will pitch the world’s
biggest economy back into recession.

Currency markets were little changed in early Asian trading,
with the euro steady around $1.2730 and the yen at 80.17
to the dollar.

The yen had fallen the most against the dollar in two months
on Wednesday after Japanese Prime Minister Yoshihiko Noda
indicated he would call a snap election for next month.

Japan’s main opposition Liberal Democratic Party, which
favours further monetary policy easing by the central bank,
leads in opinion polls and the prospect of an early election is
regarded as negative for the yen.

U.S. crude traded down a few cents around $86.25 a barrel.
Benchmark Brent crude had risen more than 1 percent on
Wednesday towards $110 a barrel after Israel launched airstrikes
in retaliation from rocket attacks on its territory, killing the
military chief of Hamas.

Gold eased 0.1 percent to around $1,724 an ounce.