Shares in Asia-Pacific struggled to find their feet on the back of a poor showing on Wall Street, while sterling edged lower after the Bank of England floated the possibility of negative interest rates.
Japan’s Topix index rose 0.2 per cent on Friday morning while Australia’s S&P/ASX 200 shed 0.1 per cent. Mainland China’s CSI 300 index added 0.4 per cent and Hong Kong’s Hang Seng inched 0.2 per cent higher.
The Hong Kong-traded shares of Tencent dropped 2.4 per cent after it was reported that the Trump administration had asked video games companies including Riot Games and Epic Games about their data security processes. Tencent, one of China’s biggest internet groups, is an investor in both.
On Thursday, Wall Street’s S&P 500 fell 0.8 per cent while the Nasdaq Composite shed 1.3 per cent as shares in big technology companies dropped.
Futures markets tipped US stocks to lose more ground when trading begins later on Friday, with the S&P 500 set to drop 0.3 per cent. London’s FTSE 100 was on track to fall 0.4 per cent.
In currencies, the pound fell 0.2 per cent against the dollar to $1.2949 during morning trading in Asia. Sterling weakened sharply on Thursday after the Bank of England said it was examining how a negative interest rate “could be implemented effectively”.
“This is a clear signal that the [monetary policy committee] intends to use this tool,” said Brian Hilliard, chief UK economist at Société Générale.
Mr Hilliard said the central bank could deploy negative rates in early 2021 “in reaction to the shock following the move to trading under [World Trade Organization] rules after the failure . . . for the trade talks with the EU”.