- A US chip rout pulled Kospi down more than 3% and Taiwan’s TAIEX lower by 1.21%.
- RBA raises its cash rate by 25 basis points to 4.85%, the highest since 2008.
- China will raise its foreign currency reserve ratio to 6% from 4% as of Nov. 15.
Two central banks in Asia tightened conditions within hours of each other on Tuesday, one by raising interest rates and the other by forcing banks to park more foreign currency with it. Cheaper oil took some heat out of the inflation story, but shares across Asia still opened lower.
Chip Rout Reaches Asia
The Philadelphia Semiconductor Index (SOX), which tracks major U.S. semiconductor stocks, has fallen 12% over three sessions, while the Nasdaq 100 has dropped 10% from its recent peak, a technical correction. Apple slid in late US trading after its first quarterly report under Chief Executive John Ternus, with thinner margins outweighing an upbeat sales forecast.
The weakness extended into Asian markets, where technology and semiconductor stocks faced renewed selling pressure.
- South Korea’s Kospi fell more than 3% at the open and by as much as 3.8% at one point.
- Taiwan’s TAIEX dropped 1.21%.
- Hang Seng futures rose 0.7%, and Hong Kong shares edged higher.
- Tokyo was closed for Culture Day.
China’s central bank also said it would urge financial institutions to make wider use of stock-support tools. Investors are waiting for US congressional election results and the Treasury’s refunding announcement.
Australia Hikes
The Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points to 4.85%, the fifth increase this year and the highest level since 2008. The vote was 6-3. Inflation ran at 4.3% in September, and the bank cited the Middle East energy shock and AI-related price pressure.
China Reins In Dollar Liquidity
From Nov. 15, banks in China must hold 6% of their foreign currency deposits in reserve, up from 4%. The move is estimated to lock up about $24 billion. The yuan has risen more than 5% against the dollar this year and was around 6.65 per dollar offshore. The yen held near 157.92. The step limits dollar liquidity rather than raising borrowing costs in yuan.
Oil Gives Back, Gold Holds
Brent and US crude each fell more than 7% in Monday’s US session, settling at $104.77 and $96.46 a barrel, after reports of Iran-related diplomacy. Asian trading added little, with Brent at $104.72. The reports describe possible talks, not a signed deal. Gold stayed above $3,950 an ounce, and silver traded near $50.77.
Bitcoin Holds, Binance Questions Remain
- Bitcoin: $76,795.83, down 2.0% in 24 hours
- Ether: $2,250.94, down 1.9%
- BNB: $695.43, down 2.2%
- XRP: $1.25, down 0.1%
About $6.3 billion was stolen in last week’s Binance breach, and users have taken out a net $4.72 billion since withdrawals resumed. Binance said that equals roughly 2.8% to 3% of its assets, mostly Tether, and promised to make customers whole.
India
GIFT Nifty pointed to a firm start for Indian shares. Finance Minister Nirmala Sitharaman repeated that she will weigh all views on equity taxation in the coming budget. Cheaper crude could also ease India’s import bill.
Related: China Targets Crypto and Cross-Border Funds in Anti-Corruption Push
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