The Turlisk lira slumped over 20% in the last four days. Photo: AFP
Tokyo/New York: Asian stocks mostly steadied on Tuesday as the contagion from the economic crisis in Turkey remained relatively contained in developed markets. The dollar slipped from its highest in 14 months and Treasuries edged lower. Japan’s equities outperformed as the yen pared some of Monday’s rise. Australian and South Korean shares also rose while those in China and Hong Kong traded lower. The offshore yuan strengthened even as data showed China’s economy hit a mid-year rough patch. European futures climbed alongside US contracts as Turkey’s lira steadied after slumping over 20% in four days.
Still, in a sign that investors are still trying to work through the implications of Turkey’s meltdown, the rupee hit the 70-per dollar mark, a record low, as emerging-market currencies remained under pressure. Earlier, Argentina’s central bank unexpectedly hiked its key interest rate as the peso slumped to a record low.
“I would be looking more for any strength that we see perhaps in the next week or two as an opportunity to sell rather than looking at it as a buying opportunity,” Ray Attrill, head of foreign-exchange strategy at National Australia Bank Ltd., told Bloomberg Television. “The biggest EM risk, it’s still ahead of us.”
The economic troubles in Turkey have gripped global financial markets, with investors scrambling to determine whether and how far pain there would spread. President Donald Trump’s top national security aide warned Turkey’s ambassador on Monday that the US has nothing further to negotiate until a detained American pastor is freed, according to people familiar, signalling a standoff between the countries will continue.