Asian stocks fall from 3-week highs, dollar retracement


SYDNEY (Reuters) – Asian stocks fell from a three-week high on Wednesday, dragged lower by Chinese stocks, although investors were still focused on the company’s next earnings to see more signs of a global economic recovery.

FILE PHOTO: A man stands on a flyover with an electronic board displaying the Shanghai and Shenzhen stock indices in the Lujiazui financial district in Shanghai, China, on January 6, 2021. REUTERS / Aly Song

Futures on the Eurostoxx 50 were down 0.1%, those on the German Dax barely changed, while futures on the London FTSE were up 0.4%. E-Mini futures for the S&P 500 were mostly flat.

Previously, MSCI’s broader Asia-Pacific equity index outside of Japan had started on a firm footing, reaching 697.01 points, a level last seen on March 18.

However, it succumbed to selling pressure and fell 0.1% after shares in China and Hong Kong opened in the red after a strong rally last week.

China’s CSI300 bluechip index was down 1%, while Hong Kong’s Hang Seng index fell 0.8%.

Geopolitical tensions in the region added to the nervousness.

Taiwan’s foreign minister said Wednesday that he will fight to the end if China attacks, adding that the United States sees the danger of this happening amid mounting Chinese military pressure, including drills of aircraft carriers, near the island. .

Other Asian markets remained positive.

Japan’s Nikkei was slightly higher, while Australia’s shares were up 0.6% and South Korea’s KOSPI added 0.3%. New Zealand finished 0.7% higher.

Overall, successful vaccine launches in the US and UK, coupled with strong macroeconomic data, have boosted investor risk appetite, helping emerging market stocks and assets.

“The US economy is experiencing the first effects of a powerful, dual-dose, broad inoculation and fiscal stimulus vaccine,” said David Kelly, chief global market strategist at JP Morgan Asset Management.

“The reality is that the forecasts remain highly uncertain … (but) early signs show that the recovery is accelerating, suggesting a faster return to ‘normal’ than many had dared to hope ago a few months, “Kelly added.

Overnight, the top three Wall Street indices closed lower, a day after the S&P 500 and Dow rose to record highs fueled by a stronger-than-expected jobs report last Friday and data that show a dramatic rebound in the US service industry on Monday. [.N]

Investors also weighed in on the latest US job vacancies report, which showed that vacancies rose to a two-year high in February, while hiring had its biggest gain in nine months amid a surge in job vacancies. COVID-19 vaccines and an additional stimulus from the government.

Additionally, the International Monetary Fund raised its global growth forecast to 6% this year from 5.5%, reflecting a rapidly improving outlook for the US economy.

The upcoming earnings season is expected to show S&P earnings growth of 24.2% over the prior year, according to Refinitiv data, and investors will be watching to see if corporate results further confirm recent economic data. positive.

Elsewhere, all eyes will be on the minutes of the US Federal Reserve policy meeting with a rally in US Treasuries running through Wednesday. Ten-year returns US10YT = RR they were down 1.6455% from a high of 1.776% on March 30.

Five-year US Treasury yields fell sharply to 0.874%, which weighed on the US dollar. [FRX/]

The yield on five-year Treasuries is seen as an important barometer of investors’ faith in the Federal Reserve’s promise that it does not expect to raise interest rates until 2024.

The dollar rebounded from a two-week low of 92.246 against a basket of world currencies.

The euro was flat at $ 1.1874, the British pound was slightly weaker at $ 1.3788, while the Japanese yen was slightly lower at 109.77.

In commodities, Brent crude futures were unchanged at $ 63.74 a barrel, while US crude rose 2 cents to $ 59.35.

Spot gold was down a bit at $ 1,741.4 an ounce.

Reporting by Chibuike Oguh in New York and Swati Pandey in Sydney; Edited by Christopher Cushing, Ana Nicolaci da Costa and Kim Coghill

.

Source link