Equity markets yesterday were mixed as investors weighed the effects of the assassination attempt on former US president Donald Trump with data suggesting it has boosted his chances of being re-elected president.
Eyes are also on a key meeting of China’s top leadership in Beijing, with hopes for measures to boost the world’s No. 2 economy, which grew less than expected in the second quarter.
Investors struggled to extend the rally enjoyed on Wall Street last week, where all three main indices ended on a positive note, despite a forecast-topping read on US wholesale prices.
Photo: AFP
The figures were not enough to overshadow Thursday’s news that the US consumer price index had slowed more than expected last month, which ramped up bets on a US Federal Reserve interest rate cut in September.
However, investors are keeping a close eye on developments in the US after Trump was on Saturday wounded at a rally ahead of the Republican National Convention this week.
While the odds of him beating US President Joe Biden had been rising in the past few weeks, they got an extra lift from the shooting.
Observers said a Trump victory could lead to lower corporate taxes — a boost for companies’ bottom lines — but also an increase in tensions with China with fresh tariffs possible.
“The assassination attempt might lead to a temporary boost in the polls for Trump, but a lot can change before November,” Moody’s Analytics economist Katrina Ell said. “Financial markets are expected to soon refocus on the Federal Reserve and the growing likelihood of a rate cut in September.”
Equity markets were mixed yesterday, with the TAIEX closing down 37.57 points, or 0.16 percent, at 23,879.36 in Taipei.
Shares in Hong Kong, Wellington, Bangkok and Jakarta also dropped, along with those in London, Paris and Frankfurt, while in Shanghai, Seoul, Mumbai, Sydney, Singapore and Manila, shares rose.
The US dollar yesterday rose, having softened last week owing to the prospect of lower rates. A potential return of Trump as the next US president might bring bad news for emerging-market currencies, given the threat of his protectionist economic policies.
The won led the broader declines in Asia and the New Taiwan dollar also edged lower. Indonesia’s rupiah and Thailand’s baht snapped eight days of gains, while Malaysia’s ringgit slipped from its highest level in January. Meanwhile, Mexico’s peso fell 0.8 percent and the South African rand was down 0.6 percent.
Official data showed the Chinese economy expanded just 4.7 percent year-on-year in the second quarter, well below the 5.1 percent forecast in a survey by Bloomberg and short of the government’s 5 percent goal.
Separately, retail sales slowed sharply last month as the country’s army of consumers remained cautious.
The “data releases showed that the road to 5 percent growth remains difficult, and more fiscal and monetary policy support will be needed in the second half of the year if this year’s key growth target is to be achieved,” ING Bank NV chief economist for Greater China Lynn Song (宋林) said.
Additional reporting by Bloomberg
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS