Asian stocks looked set to end an otherwise strong week on a down note, taking their cue from a subdued session on Wall Street as investors looked past some optimistic comments on US tax cuts and failed to catch a boost from higher oil prices.
Steve Mnuchin, the US Treasury Secretary, said the White House wanted to pass “very significant” tax reform within the next six months, and argued that these cuts, combined with a curb on regulations, could boost US GDP to at least 3 per cent, possibly as early as 2017.
Some analysts see the predicted timeline and success of the tax cuts as being too optimistic, given divisions among Republicans in Congress and that full-year US economic growth has not topped 3 per cent since 2005.
The S&P 500 closed flat on Thursday, although the blue chip Dow Jones Industrial Average rose to a record high.
Japan’s Topix index was flat, while Hong Kong’s Hang Seng was down 0.4 per cent and China’s Shanghai Composite dropped 0.2 per cent.
Australia’s S&P/ASX 200 was 0.6 per cent lower, weighed down by materials stocks.
The US dollar index was flat on Friday at 101.07, having fallen a combined 0.3 per cent in the previous two sessions. Nonetheless, Japan’s yen was 0.2 per cent weaker at ¥112.86 per dollar, and the worst-performing Asian currency as it gave up some of its 1 per cent gain over Wednesday and Thursday.
The Australian dollar was 0.1 per cent weaker at $0.7706.
Oil prices were slightly weaker in Asia, but had rallied by about 1.3 per cent on Thursday as a report from the American Petroleum Institute showed an unexpected drop in crude inventories last week. Brent crude, the international benchmark, was down 0.2 per cent today at $56.48 a barrel, while West Texas Intermediate fell by as much to $54.34.
Gold was flat at $1,249.15 an ounce after jumping 1 per cent on Thursday to its highest level since mid-November.
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