Emerging Stocks Drop, Dollar Gains on Trade Woes: Markets Wrap

Brendano McDermido („Reuters“ / „Scanpix“) nuotr.

Most Asian stocks declined on Thursday as concern simmered about an escalation of trade tensions between the U.S. and China, and Goldman Sachs Group Inc. turned cautious on the region’s equities. The dollar strengthened.

Among the biggest declines were benchmarks in Malaysia, the Philippines and Thailand, which fell at least 1 percent. Japan’s shares were little changed. Australian stocks by contrast reached an eight-year high as banks drove a continuing rally. Indonesia’s rupiah dropped more than 1 percent to pace declines in emerging-market currencies. Oil slipped below $66 a barrel ahead of a crucial OPEC meeting that will decide on output.

“At the moment we just want to be a little bit cautious,” Colin Graham, chief investment officer of multi-asset solutions at Eastspring Investments, said on Bloomberg Television. “Overall Goldilocks is still alive and it’s going to be fine this year -- risk assets are still going to outperform safe-haven assets -- but we are going to see more choppy returns.”

Worries about fresh volatility stemming from developments on trade linger after a tumultuous start to the week triggered by a ratcheting up of skirmishes by U.S. President Donald Trump with China. Goldman Sachs, a long-time bull, has pared its 12-month target for an index of Asian stocks excluding Japan, citing escalating trade tension between the U.S. and China just as global growth is slowing with tighter U.S. monetary policy and a stronger greenback. Meanwhile, Morgan Stanley said Hong Kong’s equity sell-off has further to run and slashed its 12-month for the Hang Seng Index.

Elsewhere, New Zealand’s dollar fell to its weakest in six months after data showed first-quarter growth slowed, bolstering the case for the central bank to keep rates at a historic low. Philippine stocks tumbled as the nation’s finance chief played down concerns about inflation, a falling currency and a trade deficit.

Futures on the Nasdaq Composite Index climbed after the underlying index ended at an all-time high, buoyed by a rally in Facebook Inc. Exchange-traded funds tracking equities in Argentina and Saudi Arabia gained after MSCI Inc. upgraded the nations to emerging-market status.

Here are some key events to watch for this week:

The Bank of England’s policy decision is due on Thursday. Also on Thursday: U.S. jobless claims. The Organization of Petroleum Exporting Countries meets in Vienna on Friday.And here are the main market moves:

Stocks

Japan’s Topix slipped 0.1 percent and the Nikkei 225 rose 0.6 percent in Tokyo. Australia’s S&P/ASX 200 Index gained 1 percent. Kospi index dropped 1.1 percent. Hong Kong’s Hang Seng Index fell 1.1 percent. Shanghai Composite index lost 1 percent. S&P 500 futures were up 0.2 percent. Nasdaq futures rose 0.3 percent. MSCI Asia Pacific Index lost 0.6 percent.

Currencies

The Bloomberg Dollar Spot Index added 0.3 percent. The yen lost 0.3 percent to 110.66 per dollar. The euro was at $1.1545. The pound traded at $1.3136, down 0.3 percent.