Most Asian stocks fell on Thursday amid a slide in Chinese tech stocks and as traders weighed the risks to the global recovery on the prospect of a faster tightening of monetary policy to deal with price pressures. .
MSCI Inc.’s Asia-Pacific Index fell for a second day. A Hong Kong tech gauge slipped on earnings from Baidu Inc. and Bilibili Inc., raising concerns about slowing ad revenue. Japan erased the losses in a report indicating that planned fiscal stimulus will amount to 55.7 trillion yen ($ 488 billion). US equity futures rose and Europeans fluctuated.
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Oil spread losses on the prospect of the US and others exploiting strategic reserves. China said it is working to free some crude from its stocks.
Treasuries were stable and the dollar indicator remained in sight of its highest level in about a year. The New Zealand currency surged after inflation expectations rose, fueling bets on interest rate hikes.
Investors are grappling with the risk that the Federal Reserve will reduce asset purchases and raise rates faster than expected to combat price pressures. President Joe Biden is also due to elect the candidate for Fed chairman in the coming days, with incumbent Jerome Powell and Lael Brainard in the frame.
“With these most recent inflation readings, there is some concern that the Fed will reduce the number of purchases, accelerate that reduction,” said Michael Arone, chief investment strategist at State Street Global Advisors, on Bloomberg Television. “That would be a surprise to the markets and could induce some volatility.”
He added that while Brainard and Powell are broadly aligned with monetary policy, Brainard is expected to be a bit more dovish, meaning “long-term rates will be lower for longer,” which will help stocks. of technology.
In China, Alibaba’s earnings will provide a window into the impact of Beijing’s regulatory restrictions.
Meanwhile, developers, including China Evergrande Group and Country Garden Services Holdings Co., are looking to raise funds. These steps, and a recent easing of Beijing’s policy measures, have some traders wondering if the worst is over for China’s troubled real estate sector.
A listing in India had a sour note, with One 97 Communications Ltd., operator of the country’s pioneering digital payments brand, Paytm, sinking on its debut.
Elsewhere, gold rose in line with inflation concerns, while Bitcoin was trading around $ 60,000.
“I don’t think they’re going to see those inflation concerns subside, even if some of these supply constraints are addressed,” Joyce Chang, global director of research at JPMorgan Chase & Co., said on Bloomberg Television. “Markets will start to focus more on when the Fed will have to do something.”
What to watch this week:
- Conference Board US Leading Index, Initial Unemployment Claims. Thursday
- Richard Clarida and Mary Daly of the Fed speak at the Asia Economic Policy Conference. Friday
Some of the main movements in the markets:
- S&P 500 futures were up 0.1% at 2:50 pm in Tokyo. The S&P 500 fell 0.3%
- Nasdaq 100 futures were up 0.2%. The Nasdaq 100 changed little
- Japan’s Topix index rose 0.1%
- Australia’s S & P / ASX 200 Index rose 0.1%
- Hong Kong’s Hang Seng Index fell 1.3%
- China’s Shanghai Composite Index lost 0.2%
- Euro Stoxx 50 futures changed little
- The Japanese yen was at 114.17 per dollar, down 0.1%.
- The offshore yuan was trading at 6.3764 to the dollar.
- The Bloomberg Dollar Spot Index held steady
- The euro was at $ 1.1318
- The 10-year Treasury yield was 1.58%.
- The yield on Australia’s 10-year bonds fell seven basis points to 1.80%.
- West Texas Intermediate crude was at $ 77.70 a barrel, down 0.8%.
- Gold was at $ 1,866.61 an ounce, down 0.1%.
© 2021 Bloomberg