Asian stock prices sank Monday as Turkey’s financial turmoil fueled fears ... more

A woman walks past a bank electronic board showing the Hong Kong share index outside a Hong Kong local bank Monday, Aug. 13, 2018. SYDNEY, Aug 13 (Reuters) - Emerging market currencies sold off heavily on Monday and Asian stocks were knocked lower as Turkey’s lira plunged to all-time lows on concerns over its diplomatic rift with the United States and the risk of capital flight. The benchmark was pulled lower by hefty falls in Asian heavyweights South Korea and Hong Kong, where indexes fell around 1.5 percent, while Taiwan tumbled more than 2 percent. Hong Kong's Hang Seng retreated 1.5 percent to 27,936.57 and Seoul's Kospi was 1.5 percent lower at 2,248.45. Sydney's S&P-ASX 200 shed 0.4 percent to 6,252.20 and India's Sensex was down 0.3 percent at 33,729.73. Benchmarks in Taiwan XX:Y9999 , Singapore STI, +0.30% and Malaysia FBMKLCI, -0.54% were all off more than 1%. Turkey’s local bond markets saw yields spike above 21 percent, while dollar-denominated bonds issued by the government and banks suffered a steep selloff. On Wall Street, futures for the Standard & Poor's 500 index and Dow Jones industrial averages were down 0.3 percent. TURKISH TURMOIL: Investors question whether President Recep Tayyip Erdogan's government can cope with a plunging currency, a diplomatic spat with Washington and other economic problems. The lira pared some of its losses against the dollar after the central bank said it had lowered reserve requirement ratios for banks as well as pledged to provide whatever liquidity banks needed and to take all necessary measures to maintain financial stability. The wave of selling was triggered on Friday when U.S. President Donald Trump announced tougher sanctions on Turkish steel and aluminium exports, causing a spike in emerging foreign exchange volatility gauges. "Asia should not see any contagion effect fundamentally due to the ongoing crisis in Turkey as the region does not have a meaningful exposure to the country," analysts at Singapore's DBS said in a note. However, the sell-off was not limited to emerging markets: the euro stumbled to more than one-year lows on worries about European bank exposure to Turkey. “We fail to see how the crisis can be resolved without external support,” but an International Monetary Fund support package will be difficult “given Turkey’s current political situation.”

ENERGY: Benchmark U.S. crude fell 24 cents to $67.39 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude lost 28 cents to $72.53 in London. It closed at $72.83 the previous session. Read: Turkish lira hits fresh low as Erdogan’s currency crisis echoes through stock markets

The Nikkei NIK, +0.35% was down 1.6% to lead the early declines, with the yen USDJPY, +0.05% up as much as 0.5% against other major currencies. The euro fell to $1.1373 from $1.1411.
Asian stock prices sink as Turkey’s financial turmoil fuels fears contagion might spread to other emerging markets.