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Asia equities follow US stocks lower

Tuesday 01:50 GMT

Overview

A shaky Monday for US stocks rolled into Asian trading on Tuesday as confusion persisted over President Donald Trump’s executive order to clampdown in immigration and ahead of the Bank of Japan’s interest rates decision.

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Stock markets remained closed in Hong Kong and China for the lunar new year holiday, but those open on Tuesday saw negative sentiment from Wall Street carry over into the region.

The S&P 500 Index closed down 0.6 per cent on Monday — its worst showing in the year to date — while the Dow Jones Industrial Average dropped by the same amount to below the 20,000-point mark.

Japan’s broad Topix Index was off 0.9 per cent in morning trade ahead of an interest rate decision from the Bank of Japan, led lower by a 1.6 per cent drop in utilities. Shares in Hokuriku Electric fell as much as 10.8 per cent after the electricity generation and distribution company forecast a net loss for the financial year.

The Nikkei 225 Index was down 1 per cent, with the losses coming in spite of new data showing Japan’s household spending in December contracted at its slowest rate in more than a year as the jobless level remained at a multi-decade low.

Australia’s S&P/ASX 200 was 0.6 per cent lower, with energy stocks dropping 2 per cent and shares in telecoms and materials companies off 1 per cent.

Forex

Currency moves were mostly muted ahead of the Bank of Japan’s rates decision. The yen was flat against the dollar at ¥113.81 after firming 1.2 per cent on Monday.

The Australian dollar was 0.1 per cent stronger against its US counterpart at A$0.756, having risen by the same amount the previous day.

The big exception came from South Korea’s won, which fell as much as 0.7 per cent against the greenback on Monday to Won1,168.71.

The pound was up 0.2 per cent at $1.2509, while the Mexican peso lost 0.2 per cent to 20.8344 per dollar after firming half a per cent on Monday. The dollar index, measuring the greenback against a basket of peers, was off 0.1 per cent.

Commodities

Oil prices were little moved, with the international marker Brent crude virtually flat at $55.22 per barrel on Tuesday after shedding 0.5 per cent on Monday. West Texas Intermediate, the US benchmark, was off 0.1 per cent at $52.60 per barrel after a drop of 1 per cent on Monday.

Gold crept 0.1 per cent higher to $1,197.41 per ounce, bringing it 0.8 higher from President Trump’s executive order on Friday.

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