Photographers take photos near a large screen showing stock prices on the Tokyo Stock Exchange (TSE) after the market opened on October 2, 2020 in Tokyo, Japan. Portal/Kim Kyung-Hoon/File Photo Acquire License Rights
SYDNEY, Nov 24 (Portal) – Asian stocks were dragged lower by China on Friday as Wall Street, closed for a holiday, was light on forecasts, while the dollar remained in retreat as investors bet that US interest rates have reached their peak.
The yen was little changed after data showed that core consumer inflation in Japan rebounded in October, although less than expected, and factory activity fell for a sixth straight month.
MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) fell 0.4% but is heading for a weekly rise of 0.9%. It is up a whopping 7.1% so far in November, as investors grew increasingly confident that U.S. interest rates have peaked and discussions shifted to the timing and speed of future rate cuts.
Japan’s markets (.N225) returned from a holiday, with the Nikkei (.225) gaining 1.0% and approaching a 33-year high on Monday.
Chinese blue chips (.CSI300) fell 0.3%, while Hong Kong’s Hang Seng Index (.HSI) fell 1.3%, erasing the previous day’s strong gains. Hong Kong-listed Chinese developers (.HSMPI) lost 0.7% after rising 6.4% on Thursday on further support measures from Beijing to shore up the struggling industry.
“Because equity markets recovered so quickly, they were technically overbought, so it is quite possible that we are going through a period of market consolidation,” said Shane Oliver, chief economist at AMP.
“People talk about the so-called Santa Rally, but often the Santa Rally doesn’t actually take place in the last two weeks of December. So we could have a few weeks where the markets just meander around with no direction.”
US markets were closed overnight for the Thanksgiving holiday. In Europe, slightly better-than-expected Eurozone PMIs pushed the euro and stocks higher and the Swedish krona fell as the central bank left interest rates unchanged.
Minutes from the European Central Bank’s monetary policy meeting in October showed that inflation in the euro zone fell as expected or even slightly faster, but suggested that policymakers had to keep the possibility of a rate hike on the table.
Cash Treasuries fell slightly as trading resumed in Asia. The two-year Treasury yield rose 2 basis points to 4.9338% and the benchmark 10-year Treasury yield rose 4 basis points to 4.4568%.
In the foreign exchange markets was the dollar lagging its peers at 103.71 and nearing a three-month low of 103.17.
Sterling was trading near its 2.5-month peak at $1.2575, as strong results from a business survey prompted markets to shelve bets on when the Bank of England will cut interest rates for the first time.
Oil prices were mixed after plunging more than 1% on worries about the postponed OPEC+ meeting. Brent crude futures rose 0.3% to $81.69 a barrel, while U.S. West Texas Intermediate crude fell 0.6% to $76.65 a barrel.
Gold prices were unchanged at $1,992.75 an ounce.
Reporting by Stella Qiu. Editing by Sam Holmes
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