Business Desk :
Turkish lira regained in Asia on Tuesday when European stocks rose although Indian rupee hit a record low.
According to Reuters, European shares bounced back on Tuesday after two days of heavy selling as investors’ anxieties over contagion from a Turkish currency crisis faded slightly, thanks to reassurances from the central bank and government.
The Turkish lira firmed after the central bank had pledged on Monday to provide liquidity in response to the meltdown which has unsettled global markets.
Investors were also comforted by news that Finance Minister Berat Albayrak would hold a conference call with investors from the United States, Europe and the Middle East on Thursday, his first since assuming the post almost two months ago.
Financials were the biggest driver with euro zone bank stocks .SX7E rising 0.8 per cent, helping to push the pan-European STOXX 600 benchmark up 0.4 per cent.
Banks had been the worst hit by concerns over Turkey, taking the index to a 21-month low.
Italy’s FTSE MIB .FTMIB jumped 0.8 per cent with banks .FTIT8300 gaining as bond yields fell after the government said it had agreed to preserve the stability of state finances and lower public debt.
Investors’ focus once again turned to results.
Antofagasta shares fell 4.1 per cent, the worst performer, after the Chilean copper producer reported first-half earnings fell due to weaker ore quality and higher costs, and said trade tensions were likely to hurt demand.
Swiss dental implant maker Straumann was a top gainer after results, up 4.6 per cent after it raised its full-year revenue target as organic sales growth exceeded 20 per cent for the first time in 10 years.
German utility RWE rose 2.4 per cent after it said its Innogy deal was on track and reported in-line first half profits.
Broker research also drove some sharp stock moves.
Siltronic shares fell 4.8 per cent, with traders saying Citi cut its recommendation on the stock to “neutral”. Shares in German industrial equipment manufacturer Duerr rose 3.6 per cent with traders saying local broker MM Warburg upgraded the stock to “buy” from “hold”.
A boost to “overweight” from Barclays sent Saipem shares up 2.6 per cent.
Turkish lira, equities enjoy bounce in Asia
AFP reports from Hong Kong
Turkey’s lira edged up with other emerging market currencies in Asian trade Tuesday while equities also enjoyed a bounce after the previous day’s turmoil.
Investors slowly edged back into buying mode but they are keeping a nervous eye on developments in Ankara after Monday’s bloodletting that saw the lira hit record lows against the dollar and euro, and equity markets go into freefall on concerns Turkey’s financial crisis could spread globally.
In Asia, the Turkish unit was at 6.60 to the dollar and 7.49 to the euro, well off the 7.24 to the dollar and 8.12 to the euro seen Monday but still uncomfortably high. The unit is down about a fifth against the greenback since Friday.
Fears about contagion in other economies, particularly emerging markets, sparked a sell-off across the board Monday but there were healthy recoveries in Asian business.
The Russian ruble, which lost two per cent Monday, jumped 1.7 per cent, while the South African rand was 2.2 per cent higher, having lost seven per cent a day earlier. The Mexican peso was up 1.8 per cent.
South Korea’s won was up 0.5 per cent after losing almost one per cent.
However, the rupee continued to suffer, briefly falling to a record low of 70 to the dollar as the crisis exacerbated a months-long sell-off in the Indian currency, which was already under pressure from a huge current-account deficit and higher oil prices.
NS Venkatesh, chief executive of the Association of Mutual Funds in India, told AFP investors were “concerned” about the drop but that he expected the currency to stabilise at around 69, describing India’s economy as “strong”.
“The Reserve Bank of India’s monetary policy has shown concern for the rupee’s fluctuations so investors should not be worried by knee-jerk reactions in the forex market,” Venkatesh said.
India’s central bank has raised interest rates twice this year, in part to help increase the value of the rupee.
Turkey’s crisis has been sparked by a series of issues, including a faltering economy-the central bank has defied market calls for rate hikes-and tensions with the United States, which has hit Ankara with sanctions over its detention of an American pastor.
There was some optimism from news that Donald Trump’s national security advisor John Bolton met Turkish Ambassador Serdar Kilic to discuss the pastor issue.
Traders remain nervous, though, and the central bank’s announcement that it would provide lenders with liquidity and lower the amount of cash they needed to keep in reserve largely disappointed as it made no clear promise of rate hikes, which is what most economists say is needed.
Still, Ray Attrill, head of foreign-exchange strategy at the National Australia Bank, was hopeful the crisis will not spread.
“It’s a large local difficulty, but so far the contagion has been relatively limited,” he told Bloomberg Television. “We’re seeing a little bit of signs of contagion within the eurozone, within the spreads of those government bonds in countries where the banking sector appears to have the biggest exposure as far as Turkey is concerned. You’d have to say that Turkey is relatively contained.”
Turkish lira regained in Asia on Tuesday when European stocks rose although Indian rupee hit a record low.
According to Reuters, European shares bounced back on Tuesday after two days of heavy selling as investors’ anxieties over contagion from a Turkish currency crisis faded slightly, thanks to reassurances from the central bank and government.
The Turkish lira firmed after the central bank had pledged on Monday to provide liquidity in response to the meltdown which has unsettled global markets.
Investors were also comforted by news that Finance Minister Berat Albayrak would hold a conference call with investors from the United States, Europe and the Middle East on Thursday, his first since assuming the post almost two months ago.
Financials were the biggest driver with euro zone bank stocks .SX7E rising 0.8 per cent, helping to push the pan-European STOXX 600 benchmark up 0.4 per cent.
Banks had been the worst hit by concerns over Turkey, taking the index to a 21-month low.
Italy’s FTSE MIB .FTMIB jumped 0.8 per cent with banks .FTIT8300 gaining as bond yields fell after the government said it had agreed to preserve the stability of state finances and lower public debt.
Investors’ focus once again turned to results.
Antofagasta shares fell 4.1 per cent, the worst performer, after the Chilean copper producer reported first-half earnings fell due to weaker ore quality and higher costs, and said trade tensions were likely to hurt demand.
Swiss dental implant maker Straumann was a top gainer after results, up 4.6 per cent after it raised its full-year revenue target as organic sales growth exceeded 20 per cent for the first time in 10 years.
German utility RWE rose 2.4 per cent after it said its Innogy deal was on track and reported in-line first half profits.
Broker research also drove some sharp stock moves.
Siltronic shares fell 4.8 per cent, with traders saying Citi cut its recommendation on the stock to “neutral”. Shares in German industrial equipment manufacturer Duerr rose 3.6 per cent with traders saying local broker MM Warburg upgraded the stock to “buy” from “hold”.
A boost to “overweight” from Barclays sent Saipem shares up 2.6 per cent.
Turkish lira, equities enjoy bounce in Asia
AFP reports from Hong Kong
Turkey’s lira edged up with other emerging market currencies in Asian trade Tuesday while equities also enjoyed a bounce after the previous day’s turmoil.
Investors slowly edged back into buying mode but they are keeping a nervous eye on developments in Ankara after Monday’s bloodletting that saw the lira hit record lows against the dollar and euro, and equity markets go into freefall on concerns Turkey’s financial crisis could spread globally.
In Asia, the Turkish unit was at 6.60 to the dollar and 7.49 to the euro, well off the 7.24 to the dollar and 8.12 to the euro seen Monday but still uncomfortably high. The unit is down about a fifth against the greenback since Friday.
Fears about contagion in other economies, particularly emerging markets, sparked a sell-off across the board Monday but there were healthy recoveries in Asian business.
The Russian ruble, which lost two per cent Monday, jumped 1.7 per cent, while the South African rand was 2.2 per cent higher, having lost seven per cent a day earlier. The Mexican peso was up 1.8 per cent.
South Korea’s won was up 0.5 per cent after losing almost one per cent.
However, the rupee continued to suffer, briefly falling to a record low of 70 to the dollar as the crisis exacerbated a months-long sell-off in the Indian currency, which was already under pressure from a huge current-account deficit and higher oil prices.
NS Venkatesh, chief executive of the Association of Mutual Funds in India, told AFP investors were “concerned” about the drop but that he expected the currency to stabilise at around 69, describing India’s economy as “strong”.
“The Reserve Bank of India’s monetary policy has shown concern for the rupee’s fluctuations so investors should not be worried by knee-jerk reactions in the forex market,” Venkatesh said.
India’s central bank has raised interest rates twice this year, in part to help increase the value of the rupee.
Turkey’s crisis has been sparked by a series of issues, including a faltering economy-the central bank has defied market calls for rate hikes-and tensions with the United States, which has hit Ankara with sanctions over its detention of an American pastor.
There was some optimism from news that Donald Trump’s national security advisor John Bolton met Turkish Ambassador Serdar Kilic to discuss the pastor issue.
Traders remain nervous, though, and the central bank’s announcement that it would provide lenders with liquidity and lower the amount of cash they needed to keep in reserve largely disappointed as it made no clear promise of rate hikes, which is what most economists say is needed.
Still, Ray Attrill, head of foreign-exchange strategy at the National Australia Bank, was hopeful the crisis will not spread.
“It’s a large local difficulty, but so far the contagion has been relatively limited,” he told Bloomberg Television. “We’re seeing a little bit of signs of contagion within the eurozone, within the spreads of those government bonds in countries where the banking sector appears to have the biggest exposure as far as Turkey is concerned. You’d have to say that Turkey is relatively contained.”
