Asian shares drop after global backlash against Trump immigration policy

PUBLISHED: Mon, 30 Jan 2017 06:46:43 GMT

Asian shares were lower on Monday as investors eye the international backlash against U.S. President Donald Trump’s immigration policy, which has added pressure on the dollar.

Several countries have criticized President Trump’s latest executive order to block refugees from seven predominantly Muslim countries from entering the United States for a four-month period. Several attorney generals from California, New York, Washington DC and 13 other states have pledged to fight the “unconstitutional” move, Reuters reported.

Trump defended his actions late Sunday, saying that it was about national security and not religion.

The dollar index, which tracks the greenback against a currency basket, was at 100.18 versus levels above 100.50 seen late last week after the Dow Jones industrial average rose above 20,000.

“Whether the markets start to price in a stronger Trump risk premium is yet to be seen, but the S&P 500 rallying 1 percent last week in the face of various protectionist measures suggest this premium is not yet in the market,” said Chris Weston, chief market strategist at spread-better IG, in a note on Monday.

U.S. futures were all in the red during Asian trade. Dow Jones futures were down 0.23 percent, Nasdaq futures slipped 0.3 percent and S&P 500 futures were off 0.31 percent.

Japan’s Nikkei 225 closed down 0.51 percent or 98.6 points at 19,368.85, after data showed that December retail sales rose 0.6 percent from the previous year, weaker than an expected 1.3 percent increase, Reuters reported.

Toshiba fell 3.69 percent to 250.3 yen per share, after an earlier drop of as much as 5.8 percent, on an Asahi Shimbun report that several trust banks will sue the company over management missteps. Several media reports also reported that Toshiba chairman Shigenori Shiga and Toshiba’s U.S. nuclear subsidiary Westinghouse President Daniel Roderick will both step down.

In other Japan-related news, the Bank of Japan began its two-day monetary policy meeting and is expected to keep policy steady and assuage fears that it may taper off its massive stimulus program.

Down Under, the ASX 200 closed down 0.92 percent or 54.5 points at 5,661.5, seeing broad based losses across all sub-indexes except for its gold sub-index, which was up 1.2 percent.

Gold miner Newcrest Mining shares were up 1.27 percent at A$21.45 a share, after it released its production report for the December quarter.

“Newcrest Mining had a solid production report this morning, which leave it on track to achieve production guidance for the current financial year,” said Ric Spooner, chief market analyst at CMC Markets, in a note on Monday.

Other Australian gold miners were in the green, with Evolution Mining up 1.42 percent at A$2.15 per share and Alacer Gold higher by 2.58 percent at A$2.39.

Australian insurer QBE Insurance was up 0.15 percent at A$12.35 after news that it was approached by Allianz for a potential takeover deal although no acquisition price has been proposed to QBE as of yet, an anonymous source told Reuters.

In the broader currency market, the yen strengthened 0.32 percent against the dollar at 114.34, while the Australian dollar was trading at $0.755.

Markets in China, Singapore, Hong Kong, South Korea and Taiwan are shut for public holidays.

Major U.S. indexes closed mixed after the initial fourth-quarter gross domestic product (GDP) read missed expectations. The Dow Jones industrial average was down 0.04 percent at 20,093.78, S&P 500 was down 0.09 percent at 2,294.69 and Nasdaq was up 0.1 percent at 5,660.78.

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