China Stocks Plunge; Dollar Steady After Fed Hit: Markets Wrap
Chinese stocks fell sharply and shares in Hong Kong also declined after a recent surge that prompted government warnings about runaway prices. The dollar held onto losses after tumbling as the latest Federal Reserve meeting minutes suggested divisions over the future path for U.S. monetary policy.
The Shanghai Composite Index was on track for its biggest slide since December. Investors in Chinese equities have been rattled in recent weeks by a bond market rout and concerns the government is trying to rein in gains in surging stocks.
The Bloomberg dollar spot index fell to the lowest level since October on Wednesday and Treasuries added to gains, pushing the 10-year yield to 2.32 percent. Gold and oil were down after rallies. The U.S. is closed Thursday for the Thanksgiving holiday, and Japan is also shut. The MSCI Asia Pacific Ex Japan Index declined.
Fed meeting minutes showed several policy makers were concerned about soft inflation, though many still saw a near term rate hike as warranted. Equities remain on track to close out the year near all-time highs with investors in the stock market optimistic about global growth and company earnings.
In Asian economic news, Singapore raised its growth forecast for this year, underscoring strength across Southeast Asian economies, with third-quarter data from the Philippines, Malaysia and Thailand exceeding forecasts.
The yen remained near a nine-week high against the dollar. The euro held on to gains as efforts continued to end Germanys political impasse. Chancellor Angela Merkels party is betting on a revived alliance with the Social Democrats to dodge the risk of new elections after coalition talks with two other parties broke down, according to people familiar with discussions in Berlin.
Here are some key events scheduled for the remainder of the week:
Minutes from the European Central Banks October meeting due on Thursday could show dissent in the discussion about tapering. New Zealand October trade and South Korea November consumer confidence are due Friday.These are the main moves in markets:
Euro Stoxx 50 futures fell 0.3 percent in early European trading. Contracts on the S&P 500 Index were flat. The underlying gauge fell 0.1 percent. The Shanghai Composite Index fell as much as 2.57 percent before recovering slightly. Hong Kongs Hang Seng Index was down 1 percent. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong fell more than 1 percent, retreating from an advance of as much as 1.1 percent. Australias S&P/ASX 200 Index ended flat and South Koreas Kospi index was down 0.1 percent. The MSCI Asia Pacific Ex Japan Index fell 0.2 percent. Japan markets were closed Thursday for a holiday.
The Bloomberg Dollar Spot Index was steady after its biggest drop since March. The yen was little change at 111.21 per dollar. The euro was up 0.1 percent at $1.1833. The Aussie dollar was trading at 76.20 U.S. cents. The pound was at $1.3324, near its strongest in almost eight weeks.
The yield on 10-year Treasuries fell four basis points to 2.32 percent. German 10-year bund yields were little changed at 0.35 percent.
West Texas Intermediate crude was trading at $57.91 a barrel, near its highest since mid-2015, as U.S. crude stockpiles declined. Gold was down 0.2 percent at $1,289.65 an ounce.
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