Asia: Stocks stutter as FBI probe of Clinton jolts markets

[SINGAPORE] Asian stocks got off to a shaky start on Monday after a renewed FBI probe of US Democratic presidential candidate Hillary Clinton's use of a personal email server sparked fresh tumult in markets, just days before the Nov 8 presidential vote.

The Japanese yen, seen as a safe-haven in times of uncertainty, rose slightly against the US dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.2 per cent in early trading on Monday. It is set to end the month down 2 per cent.

Japan's Nikkei slipped 0.6 per cent, but remains poised for a monthly gain of 5.4 per cent.

On Friday, Wall Street and the dollar closed lower, after FBI Director James Comey sent a letter to the US Congress informing it that the agency is again reviewing emails related to the private server Clinton used when she was secretary of state.

Markets have tended to see Mrs Clinton as the candidate of the status quo, while there is greater uncertainty over what a victory for her Republican rival Donald Trump might mean for US foreign policy, international trade deals or the domestic economy.

Mr Comey had decided in July that the Federal Bureau of Investigation was not going to seek prosecution of Mrs Clinton for her handling of classified materials.

"There seems little doubt that a Trump victory would trigger selling in stock markets from current levels," Rick Spooner, chief market analyst at CMC Markets in Sydney, wrote in a note. "This has traders nervous as they start the week assimilating fresh news on Hillary Clinton's email problems."

US media reported on Sunday that the FBI has secured a warrant to examine newly discovered emails related to Mrs Clinton's private server, Mr Trump had fallen in the polls for most of the past six weeks, but an ABC News/Washington Post poll released on Sunday showed Mrs Clinton with a statistically insignificant 1-point national lead on her Republican rival.

The dollar surged 0.7 per cent against the Mexican peso on Friday and extended those gains by another 0.2 per cent to 18.9982 peso early on Monday.

A Trump victory has been viewed as a key risk for the Mexican currency given his promises to clamp down on immigration and redraw trade relations with the country.

The dollar was little changed at 104.86 yen early on Monday after falling 0.4 per cent on Friday. It remains up 3.4 per cent for the month.

The euro retreated 0.2 per cent to US$1.0970 in early trade after jumping 0.9 per cent on Friday. It is poised to end October with a 2.5 per cent loss.

Adding to the list of potential market-moving events this week is a raft of PMI data out of several countries; central bank policy meetings, including Japan and Australia on Tuesday, the US on Wednesday and the Bank of England on Thursday as well as US October non-farm payrolls on Friday.

Oil prices extended their slide - driven by renewed oversupply concerns - and have surrendered most of the gains made in the first half of October. They are set to end the month with meagre gains.

The latest oil woes were prompted after non-Opec producers failed to make any specific commitment to join the Organization of Petroleum Exporting Countries in limiting output to support prices on Saturday.

US crude slid 0.5 per cent to US$48.44 a barrel on Monday, up 0.4 per cent for the month, while global benchmark Brent retreated 0.5 per cent to US$49.44, up 0.8 per cent in October.

REUTERS