Stocks Fall as Rally Loses Steam; U.S. Yields Dip: Markets Wrap

Publikuota: 2018-01-11 09:40
Juditos Grigelytės (VŽ) nuotr.
Juditos Grigelytės (VŽ) nuotr.
 

The stellar run for equities that ushered in the new year showed signs of waning in Asia on Thursday as the yen remained near a six-week high and traders dialed back their appetite for risky assets amid a jump in government bond yields.

Shares from Shanghai to Sydney edged lower after the S&P 500 Index declined overnight. While a tad weaker on Thursday, the yen remains on course for its best week since mid November. Yields on 10-year Treasuries retreated after China said a news report on officials having recommended slowing or halting purchases of U.S. bonds might have cited a “wrong source.” Australia’s dollar rose after a strong retail sales report.

The best start to a year on record for Asian equities is being greeted with concern that rising yields may test stock valuations. This week’s climb in Treasury yields caused one key share-price measure to signal that conditions are the most overheated since 2010. Goldman Sachs Group Inc. has warned shifting expectations about the pace of U.S. monetary tightening may trigger a stock-market correction.

“It’s better to take some chips off the table -- markets do look a little frothy,” Mikio Kumada, Hong Kong based global strategist at LGT Capital Partners, told Bloomberg TV. “Eventually there will be a sell off or a correction that will offer better opportunities.”

The Canadian dollar and Mexican peso added to declines triggered by a report that Canadian officials see rising odds the Trump administration will leave Nafta. Canadian officials, speaking Wednesday on condition they not be identified, said there’s an increasing likelihood President Donald Trump will give notice about a withdrawal from Nafta, threatening the decades-old trade regime.

Here are some of the main events to watch for this week:

U.S. inflation data are forecast to show price pressures remain muted for now, giving hawks little reason to argue for faster tightening. Outgoing New York Federal Reserve Bank President Bill Dudley is scheduled to speak later this week. JPMorgan Chase & Co. and Wells Fargo & Co. are due to report earnings on Friday.Terminal users can read more in our markets blog.

These are the main moves in markets: Stocks

Japan’s Topix index slid 0.2 percent at the close in Tokyo. Hong Kong’s Hang Seng Index fluctuated, while the Shanghai Composite rose 0.1 percent. South Korea’s Kospi declined 0.5 percent and gauges in Singapore, Malaysia and Taiwan were all down. Futures on the Euro Stoxx 50 Index and the U.K.’s FTSE 100 Index pointed to a slightly firmer start at 8:30 a.m. Frankfurt time. Futures on the S&P 500 Index added 0.1 percent after the underlying gauge slipped by as much Wednesday, paring losses of as much as 0.6 percent earlier in the session. The MSCI Asia Pacific Index lost 0.4 percent, having climbed 4.1 percent from the start of the year through Wednesday.

Currencies

The yen slid 0.4 percent tot 111.83 per dollar after rising 1.1 percent Wednesday. The Bloomberg Dollar Spot Index rose 0.1 percent after its 0.2 percent drop Tuesday. The loonie nudged lower to C$1.25534 after sinking 0.7 percent in the previous session. The euro was little changed at $1.1946. The Aussie climbed 0.4 percent to 78.73 U.S. cents.

Bonds

The yield on 10-year Treasuries fell to 2.54 percent, halting five days of gains. German 10-year bund yields fell about 2 basis points to 0.526 percent.

Commodities

Gold futures rose 0.1 percent to $1,318 an ounce. West Texas Intermediate crude was flat at $63.49 a barrel, trading near the highest in more than two years.

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