Tata Steel, Tencent lift Nikkei Asia300 Index on week; Trump woes weigh
HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan ended higher this week, with Tencent Holdings and Tata Steel leading the advances, even as investors considered the fate of President Donald Trump's economic agenda amid a political turmoil in the U.S.
The Nikkei Asia300 Index fell 0.2%, or 1.9 points, to 1,214.37 on Friday, but ended the week 0.2% higher. India's Tata Steel surged 12% this week after reporting a narrower March quarter loss on Tuesday. The steelmaker struck a deal to help end a long-standing pension standoff in the U.K. that would also make way for the sale of the company's European operations, including the remaining British business, to Germany's ThyssenKrupp. Tencent Holdings rose 4% on week to record highs after reporting better-than-expected quarterly earnings.
Risk sentiment took a hit this week after media reports that Trump interfered with a federal investigation spooked investors as outlook for his economic policies came into question. The president was already under fire for dismissing Federal Bureau of Investigation Director James Comey last week and allegedly disclosing sensitive information to a Russian diplomat. Hopes of pro-growth economic policies, especially tax cuts, have driven U.S. indices to record highs repeatedly since Trump assumed office. The reports prompted Wall Street's biggest single-session decline in eight months and drove a 46% spike in volatility.
"U.S. politics may be a convenient trigger and driver. But the bigger and simpler story is that equities are richly valued, lack new drivers, and carry the burden of some pretty big expectations," DBS said in a note. "The correction in global equities we warned of last week appears to have started. And while it will be driven by political dynamics in the United States, the correction will likely be across all developed markets. Asia ex-Japan and Emerging Markets offered better value. Hence, they could be more resilient."
The country index for China rose 1.4% this week, while Hong Kong's gauge shed 0.9%. Cathay Pacific Airways jumped 3.9% this week after saying it is making "significant progress" on its restructuring and that it saw an end to fuel hedging losses. The week's gains came even as MSCI said it plans to drop the airline from its Hong Kong index at the end of this month.
Malaysia's gauge added 0.3% for the week, led by a 3.6% jump in DRB-Hicom amid hopes it will be able to sell its unprofitable Proton unit.
Neighboring city-state Singapore's index fell 0.3%, hurt by a 10% slump in taxi operator ComfortDelGro after its first-quarter earnings missed expectations. Singapore Post lost more than 6% this week after saying it was conducting a review of its acquisition of U.S. e-commerce firm TradeGlobal.
Indonesia's gauge jumped 2.1% this week, spurred by a 3.3% jump on Friday. Standard & Poor's Global Ratings on Friday raised the nation's credit rating to BBB- from BB+ with a stable outlook.
In the rest of Southeast Asia, the country gauge for the Philippines lost 0.5% after first-quarter gross domestic product numbers missed expectations, while indexes for Vietnam and Thailand rose.
India's index ended 0.07% lower for the week. Investors continue to await progress on the implementation of a nationwide Goods and Services Tax as a council meets in Srinagar in the northern-most state of Jammu and Kashmir.
-- Nimesh Vora and V.Phani Kumar
--Nikkei Markets is a real-time financial news service for South East Asia's markets published by Nikkei NewsRise Asia Pte Ltd, a Nikkei and NewsRise joint venture company. Nikkei Markets provides wide companies coverage in the region, including the Nikkei's Asia300 companies.