Asian Stock Rebound Falters as U.S. Futures Drop: Markets Wrap

Japan’s benchmarks eked out slim gains at the close after retreating from the session’s highs, as S&P 500 Index futures declined and Chinese shares dropped, suggesting the recovery isn’t yet on solid ground. The dollar slipped and gold edged higher. A topsy-turvy session for the S&P 500 Index ended with the gauge advancing 1.7 percent on Tuesday and the Cboe Volatility Index sank almost 20 percent.

The sharp sell-off in stocks around the world that started last week and accelerated this week can be explained by a multitude of factors from concerns over the path of U.S. monetary policy to a rapid unwinding of trades predicated on continued low volatility in markets. Traders are now watching whether this rally can be sustained after the slump left markets from Europe to Japan in technically oversold territory.

Signs of a rebound encouraged a welter of calls to “ buy the dip.” Goldman Sachs Group Inc.’s chief strategist was among those saying it’s time to buy U.S. stocks.

Meantime, oil rose after three days of declines as an industry report was said to show an unexpected decline in U.S. crude stockpiles. Metals advanced. Bitcoin traded around $7,400 after at one point sinking below $6,000 for the first time since October.

Here are some key events scheduled for this week:

India’s central bank will probably hold and maintain a neutral stance Wednesday. Governor Urjit Patel is in a bind, needing to both reduce inflation and keep rates low enough to ensure Prime Minister Narendra Modi can bridge a wider fiscal deficit. The Reserve Bank of India is probably overestimating CPI and economic growth, allowing policy makers to tilt back toward easing by midyear, Bloomberg Economics said. Monetary policy decisions are also due this week in Russia, Brazil, Poland, Romania, the U.K., New Zealand, Serbia, Peru and the Philippines. Earnings season continues with reports from Philip Morris, Tesla, Rio Tinto, L’Oreal and Twitter. New York Fed President William Dudley and Dallas Fed President Robert Kaplan are among policy officials due to speak.

These are the main moves in markets:

Stocks

The MSCI Asia Pacific Index advanced 0.2 percent as of 4:19 p.m. Tokyo time. Topix index rose 0.4 percent. Hong Kong’s Hang Seng Index fell 0.4 percent. Kospi index dipped 2.3 percent. Australia’s S&P/ASX 200 Index rose 0.7 percent. Futures on the S&P 500 Index fell 0.6 percent.Currencies The Bloomberg Dollar Spot Index fell 0.2 percent. The Japanese yen rose 0.4 percent to 109.16 per dollar. The euro rose 0.2 percent to $1.2398.

Bonds

The yield on 10-year Treasuries fell three basis points to 2.77 percent. Japan’s 10-year yield fell less than one basis point to 0.076 percent.

Commodities

West Texas Intermediate crude rose 0.8 percent to $63.91 a barrel. Gold gained 0.6 percent to $1,331.58 an ounce. LME copper rose 0.5 percent to $7,112.50 per metric ton.