Global Stocks Fall Following Tillerson Firing – Wall Street Journal

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U.S. Secretary of State Rex Tillerson in Washington on Tuesday.


Photo:

leah millis/Reuters

The global pullback in equity markets continued in Asia on Wednesday following the firing of U.S. Secretary of State

Rex Tillerson.

Many investors, though, said they were nonplused by the move given the recent churn in the Trump administration.

Financials and tech stocks, two of the best-performing sectors in the U.S. so far this year, led Tuesday’s declines. And 10-year Treasury yields pulled back. Rising bond yields have raised hopes of higher earnings for banks and insurers.

After four straight days of gains in Japan, Taiwan and South Korea, indexes in all three stock markets fell about 0.5% in recent trading.

In Japan, chip makers

Renesas Electronics


RNECY 0.18%

and Rohm dropped 3.8% and 2.3% respectively while Taiwan Semiconductor Manufacturing pulled back 1.4%. Late Monday, President

Donald Trump

blocked an effort by

Broadcom


AVGO -0.62%

to acquire

Qualcomm
,

citing a national security threat.

In Hong Kong, stocks opened down more than 1% on weakness from banks and tech companies.

A U.S. index of chip stocks fell 1.6% Tuesday and the Nasdaq Composite’s seven-day winning streak was snapped.

Meanwhile, signs have emerged that corporate earnings have started to ease in some parts of the Asia-Pacific region, notably South Korea and Taiwan, said Sean Taylor, chief investment officer for Asia-Pacific at Deutsche Asset Management.

“We’ve taken money out of Asia and put it into the rest of emerging markets,” he said.

Australia’s stock benchmark fell about 0.6%, hurt by weakness in commodity related stocks. But crude futures rose slightly in Asian trading as a U.S. industry group issued upbeat weekly inventory data. New Zealand’s NZX 50 shed 0.4%.

Overnight, U.S. inflation data showed that price pressures remained muted in February even as the economy gathered steam. The prospect that the Federal Reserve might have to act more aggressively to contain inflation helped spark last month’s global slide for stocks.

The U.S. dollar slipped against the yen, with the dollar last buying ¥106.73 after hitting ¥107.29 in U.S. trading hours. Minutes from the Bank of Japan’s February meeting showed that some board members warned the central bank should keep a close eye on unexpected side effects from the current ultralow rate policy.

The ICE U.S. Dollar Index, which tracks the dollar’s strength against a basket of six major currencies, was little changed.

Write to Gregor Stuart Hunter at gregor.hunter@wsj.com

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