Advertisement

Asian shares fragile as Trump turmoil, Korea tensions weigh

From Reuters - August 20, 2017

TOKYO (Reuters) - Asian shares were fragile on Monday as investors remained unconvinced about U.S. President Donald Trump's ability to fulfill his economic agenda, even as the departure of his controversial policy strategist raised hopes of some progress.

Japan's Nikkei shed 0.4 percent to hit a 3-1/2-month low, shrugging off a Reuters poll which showed confidence at Japanese manufacturers rose to its highest level in a decade in August.

MSCI's broadest index of Asia-Pacific shares outside Japan was barely in the black thanks to modest gains in China, but in most other markets, including Australia, South Korea and Taiwan were in the red.

S&P Mini futures were down 0.1 percent at 2,423, not far from their one-month low of 2,419.5 touched on Friday.

Wall Street shares got only a short-lived boost on Friday after Trump fired White House chief strategist Steve Bannon.

"Markets seem to think that the administration will remain fragile and its ability to carry out its policies will be hampered even after Bannon's departure," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Although Bannon's departure removes a major source of friction within the White House, Trump's attacks on fellow Republicans following violence in Virginia earlier this month have isolated him, prompting some Republicans to beginning questioning Trump's capacity to govern.

Investors were also wary of any flare-up of tensions between North Korea and United States as U.S. troops and South Korean forces started a joint exercise on Monday.

Many investors suspect Pyongyang might respond to the latest drill with more sabre-rattling, such as missile tests, although it has said last week it delayed a decision on firing four missiles toward Guam, home to a U.S. air base and Navy facility.

Tech-heavy Korean shares - one of the best performers globally for much of this year -have lost momentum since last month, partly on worries about escalating tensions in the Korean Peninsula.

JACKSON HOLE

Advertisement

Continue reading at Reuters »