Views Article – Sharenet Wealth

Asia, Forex

Stocks fall on trade worries, weak economic data

* Mainland China shares lead equity declines

* Bank of Korea and Indonesia cut interest rates

By Agamoni Ghosh

July 18 (Reuters) – Emerging-market shares fell on Thursday amid weak economic data from Japan and disappointing corporate results in the United States, the latest signs the U.S.-China trade conflict was unlikely to be resolved anytime soon.

MSCI’s index for emerging-market shares slid 0.2%, led by declines for mainland China shares led declines, and Hong Kong’s Hang Seng dropped 0.6%.

Outside Asia, Moscow stocks fell 0.3%. Johannesburg trading was mostly flat.

Most developing-world currencies gained against a tepid dollar.

Growth worries have pushed central banks around the world to adopt a more dovish stance, following the U.S. Federal Reserve’s lead, with the Bank of Korea going a step ahead and surprising with a rate cut on Thursday.

South Korea’s won rose 0.2% after the Bank of Korea unexpectedly cut interest rates on Thursday. A brewing trade dispute with Japan may have put more pressure on the trade-dependent economy’s central bank to move.

“The addition of the Japan-South Korea trade tensions into the mix was perhaps the final straw that tipped the BoK over into calling for a rate cut, against a market consensus of a 15/10 hold/cut,” said Howie Lee, an economist at OCBC Bank.

Indonesia’s central bank joined the doves, cutting its benchmark interest rate for the first time in nearly two years in a bid to lift sluggish economic growth. The rupiah was little changed.

The rand was up 0.3% before a South African central bank meeting where officials were expected to cut rates by 25 basis points.

The Turkish lira was only 0.2% lower, an underwhelming response to the U.S. decision to remove Ankara from the F-35 fighter jet programme after it began taking delivery of a Russian missile defence system last week.

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For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Agamoni Ghosh in Bengaluru)

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