Asia Stocks Fall After Stellar Run; Korea Tumbles: Markets Wrap
South Korean shares dropped by the most since November, leading declines in Asia, after President Moon Jae-in announced plans to raise taxes on big corporations. Stocks from Japan to Australia retreated, dragging down the MSCI Asia Pacific Index from its highest since December 2007. The euro, the best-performing Group-of-10 currency this year, maintained most of its surge against the dollar and the 10-year Treasury yield was at 2.26 percent. The greenback held near a two-year low as Federal Reserve speakers expressed caution over further interest-rate increases.
Investors are also weighing a report that U.S. President Donald Trump’s administration is preparing to investigate China over what the administration perceives to be violations of intellectual property, a move that would not only impact trade ties between the world’s two biggest economies, but could have negative ramifications for the global economy.
Corporate results are dominating sentiment this week, while Friday’s report on the U.S. employment market may provide the next inflection point, as investors look for clues on the strength of the world’s largest economy and the Federal Reserve’s next policy move. BMW AG reported a 7.5 percent increase in second-quarter earnings early Thursday, while results at Siemens AG and UniCredit SpA were also positive.
Here are some key upcoming events:
Bank of England Governor Mark Carney may signal a more hawkish tone when the central bank announces a policy decision and releases its quarterly inflation report on Thursday. The BOE will likely keep rates on hold. U.S. jobs data on Friday will probably show employers added about 180,000 workers in July.
Here are the main moves in markets: Stocks
The Kospi index fell as much as 2.2 percent, the most since Nov. 9, the day after the U.S. election, and ended the day 1.7 percent lower in a test to a rally that propelled the benchmark to a record high last month. Samsung Electronics Co., which has the largest weighting on the index, dropped 2.5 percent. The government unveiled plans to raise taxes on big corporations and high-earning individuals Wednesday as Moon has vowed to tackle inequality. Japan’s Topix index closed little changed near a two-year high as investors parse through recent earnings results. Australia’s S&P/ASX 200 Index lost 0.2 percent as Rio Tinto shares tracked their London stock lower. Hong Kong’s Hang Seng Index was down 0.3 percent and the Shanghai Composite Index also fell 0.5 percent. Contracts on the Euro Stoxx 50 fell 0.1 percent as of 7:43 a.m. in London. Futures on the S&P 500 Index lost 0.1 percent. The underlying gauge added 0.1 percent and the Dow Jones Industrial Average rose 0.2 percent on Wednesday to break through 22,000. Tesla Inc. shares were up more than 7 percent in after-hours trading after the company burnt through less cash than expected in the second quarter.
Currencies
The euro fell 0.1 percent to $1.1846 after climbing 0.5 percent in the previous session. The yen was little changed against the dollar at 110.61. The Bloomberg Dollar Spot Index added 0.1 percent after slipping 0.1 percent on Wednesday.
Bonds
The yield on 10-year Treasuries slipped one basis point to 2.26 percent. Yields on 10-year German bunds were steady at 0.49 percent. 10-year yields in Australia fell to 2.67 percent.
Commodities
West Texas Intermediate declined 0.6 percent to $49.30 per barrel. It rose 0.9 percent on Wednesday. Record demand for gasoline helped ease concerns that increasing crude production from America’s shale fields will worsen a global glut.
