Asia-Pacific Markets Mull Over U.S. Tax Reform and Russia Probe -- 2nd Update

By Kenan Machado Features Dow Jones Newswires

Asia-Pacific stock markets struggled to gather momentum Monday after pockets of selling last week, notably in tech.

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Buying built ahead of the midday break in some markets, notably Hong Kong and China, but selling resumed afterward. Japan slid to session lows ahead of the close.

Investors are considering the impact of U.S. news that landed after Friday's close: The Senate passed its version of the tax overhaul and former national security adviser Michael Flynn pleaded guilty to lying to federal investigators. Mr. Flynn himself isn't of market importance, said ANZ, but that he is now cooperating with the special counsel's probe of President Donald Trump's election campaign and could implicate key people further up the chain is.

The probe had an impact on Friday's market action in the U.S. and Europe, aggravated by what later proved to be an erroneous report about Mr. Flynn. S&P 500 futures were recently up 0.6%, after the index fell 0.2% Friday.

The U.S. dollar rebounded from Friday selling, and is up a half-yen from late-Friday New York levels at Yen112.80. The WSJ Dollar Index was recently up 0.3%.

The weaker yen didn't help the Nikkei, which closed down 0.5%. Tech was again a factor, with Apple vendor Alps Electric falling 2.6% and videogame maker Nintendo dropping 1.9%. Olympus slid 4.7%, its biggest drop in four months.

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The afternoon softness extended to Hong Kong, where the Hang Seng lost nearly half its morning gains before stabilizing; it recently sat 0.5% higher on the day. It fell every day last week, its first five-session slide in 13 months.

Oil stocks helped in Hong Kong and elsewhere, even as oil futures fell some 0.5% in Asia--giving up some of their end-of-week gains, which had been stoked by the weaker dollar.

Most of the Hang Seng's gain, though, came from index heavyweight Tencent, up 1.8% as it rebounds from its first correction of 2017, and insurer Ping An, up 2.5% after likewise stumbling its way out of November. "The weakness in Tencent and Ping An is attracting interest from value buyers," said Castor Pang, head of research for Core Pacific-Yamaichi International.

After declines last week, benchmarks in Korea and Taiwan rose 1.1% and 0.5% respectively, while the large-cap CSI 300 in China was recently up 0.7%.

In Australia, the S&P/ASX 200 ended nearly flat, commodities gains offset by further weakness in banks as an investigation of the financial sector nears.

Indonesia's stock benchmark rebounded 1% after a downward adjustment of nearly 100 points at Thursday's close; the market was closed for a holiday Friday. The JSX, which has hit a number of record closes of late, was recently at 6009, putting the year's advance at 13%.

Bitcoin pulled back from its latest record of nearly $12,000, set Sunday afternoon in the U.S., but remained well above its $9,500 level of Friday afternoon in Asia. The virtual currency gained through the rest of Friday's global session--helped by regulatory approval of bitcoin futures in the U.S.--ending the day at $11,000.

It stuck around that level before starting to rally as daybreak neared Sunday on the U.S. East Coast, briefly topping $11,800. It then dropped nearly to $10,500 within two hours. Bitcoin was around $11,500 in Monday afternoon Asian trading, according to CoinDesk.

Write to Kenan Machado at kenan.machado@wsj.com

(END) Dow Jones Newswires

December 04, 2017 03:20 ET (08:20 GMT)