Asian stocks post mixed results ahead of Christmas after Trump’s Treasury Secretary Steven Mnuchin called top banking executives in the wake of Wall Street’s worst week in a decade
- U.S. stocks have fallen sharply with Wall Street suffering worst week in a decade
- Treasury Secretary Steven Mnuchin called six top bankers in a bid to stem panic
- Hong Kong and Seoul both dropped in Monday trading while Shanghai closed up
Asian stocks posted mixed results today after US Treasury Secretary Steven Mnuchin called top American banking executives in the wake of Wall Street’s worst week in a decade.
U.S. stocks have fallen sharply in recent weeks on concerns over slowing economic growth, with the S&P 500 index on pace for its biggest percentage decline in December since the Great Depression.
The Dow and the Nasdaq ended Friday with their biggest weekly drop since the start of the global financial crisis as investors took fright over a government shutdown in Washington, President Donald Trump’s public feuding with the Federal Reserve and the US-China trade war returning to the forefront.
Hong Kong and Seoul both dropped in Monday’s trading while Sydney and Shanghai closed up. Tokyo was closed for a public holiday.
The mixed regional bag came after Mnuchin spent much of the weekend in damage control mode following multiple media outlets reporting that Trump had privately asked cabinet members if he has the authority to fire Fed Chairman Jerome Powell.
Asian stocks posted mixed results today after US Treasury Secretary Steven Mnuchin called top American banking executives in the wake of Wall Street’s worst week in a decade (file picture)
Treasury Secretary Steven Mnuchin called six top US bankers on Sunday amid concerns over falling stocks
Last week, the central bank hiked rates, infuriating Trump who has ignored the traditional respect for the Fed’s independence, calling it ‘crazy’, ‘out of control’ and a greater economic threat than China.
Mnuchin denied the reports of Trump seeking Powell’s scalp, tweeting on Saturday that the president told him: ‘I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so.’
The following day, Mnuchin announced he had called senior executives from six of the largest American banks to discuss the market turmoil and received assurances.
‘The banks all confirmed ample liquidity is available for lending to consumer and business markets,’ the Treasury said in a statement attached to a tweet from Mnuchin announcing the calls.
‘We continue to see strong economic growth in the US economy with robust activity from consumers and business,’ Mnuchin was quoted in the statement as saying, adding that he would convene a call with the President’s Working Group on financial markets later Monday.
U.S. stocks have fallen sharply in recent weeks on concerns over slowing economic growth, with the S&P 500 index on pace for its biggest percentage decline in December since the Great Depression
‘Today I convened individual calls with the CEOs of the nation’s six largest banks,’ Treasury Secretary Steven Mnuchin said on Twitter
Analysts expressed both surprise and alarm at Mnuchin’s Sunday statement, saying it might do the opposite of calming current jitters.
‘Nothing says don’t panic like saying ‘I’m calling the plunge protection team tomorrow’,’ Michael O’Rourke, JonesTrading’s chief market strategist, told Bloomberg News.
‘I honestly think that’s the type of event that’s going to startle markets and create more panic and fear when it’s meant to create confidence.’
Last week’s turmoil in Washington – which included a government shutdown that appears likely to last until at least Thursday and the abrupt resignation of Defense Secretary Jim Mattis – has spooked markets worldwide.
Mixed global results after Wall Street’s worst week in a decade
Key figures from around 5am (GMT) today:
Tokyo – CLOSED
Hong Kong – Hang Seng: DOWN 0.4 percent at 25,651.38
Shanghai – Composite: UP 0.43 percent at 2,527.01
Euro/dollar: UP at 1.1390 from at $1.1378
Dollar/yen: UP at 111.00 yen from 111.03
Pound/dollar: UP at $1.2662 from $1.2658
Oil – West Texas Intermediate: UP 43 cents at $46.02 per barrel
Oil – Brent Crude: UP 55 cents at $54.37 per barrel
New York – Dow: DOWN 1.81 percent at 22,445.37 (close)
London – FTSE 100: UP 0.1 percent at 6,721.17 (close)
Japan’s Nikkei hit a fresh 15-month low on Friday with its fourth consecutive day of losses, joining the tech-rich Nasdaq in bear territory.
In European markets on Monday London and Paris were down 0.65 and 0.92 percent respectively in early morning trade while Frankfurt was up 0.21 percent.
Oil inched higher in Asian trade after crude-producing nations said they expect prices will arrest their recent slide and rebalance early next year, when a deal on new production cuts takes effect.
However, analysts said prospects for a global economic slowdown in the coming year – which would weaken crude demand – and rising US shale output are dampening sentiment and limiting any rebound from the current 15-month lows.
Prices have plunged by around 40 percent from four-year peaks reached in early October on concerns about oversupply and weaker demand.
In foreign exchange markets, the yen rose 0.1 percent to 111.10 per dollar, the euro was up 0.2 percent at $1.1390 and the pound was at $1.2662, a 0.1 percent rise.