Asian stocks and US equity futures drifted lower Thursday, with moves of less than 1% in key indexes. The dollar edged higher in subdued trading that saw major currencies confined to narrow ranges.
(Bloomberg) — Asian stocks and US equity futures drifted lower Thursday, with moves of less than 1% in key indexes. The dollar edged higher in subdued trading that saw major currencies confined to narrow ranges.
Lackluster trading in Asia contrasted with gains overnight on Wall Street that pushed US tech shares into a bull market amid bets that a peak in interest rates are near and bank turmoil will continue to ease.
A gauge of Asia shares fell about 0.5%, with slightly larger declines in Japanese and Chinese indexes while the Australian and South Korean markets eked out increases.
An initial advance in Hong Kong-listed tech companies fizzled as a rally in Alibaba Group Holding Ltd. evaporated. Chief executive Daniel Zhang said the company would consider gradually giving up control of some of its main businesses. His short briefing Thursday came after an overhaul announced earlier in the week that sparked a 12% rally in the stock on Wednesday.
Contracts for the S&P 500 were down about 0.1% following a gain of 1.4% for the index on Wednesday. Those for the Nasdaq 100 fell 0.2% after a 1.9% jump in the gauge, which cemented its 20% rebound from a low in December.
The tech-heavy index, which includes Apple Inc., Microsoft Corp., and Amazon.com, closed at the highest level since August in a sign investors are preparing for the Federal Reserve to end its interest rate hiking cycle and potentially pivot to looser policy later this year.
Treasuries were flat across the curve extending muted action on Wednesday when the 10-year benchmark moving by the smallest margin in more than a month. Australian and New Zealand government bond yields were moderately higher.
The dollar rose fractionally in Asia on Thursday after strengthening as investors digested the latest remarks by Fed officials and looked ahead to core PCE data for clues on how the Fed’s next move. Investors now expect US rates to sit around 4.3% by the end of the year, around 70 basis points lower than the current level.
“The Fed remains in a very difficult position,” wrote Chris Senyek of Wolfe Research in a note. “With banks stabilizing, inflation still way above target, the labor market still historically strong, and the Fed desperately needing to rebuild credibility, our sense is that the FOMC will hike by 25 basis points on May 3.”
A busy day of Chinese earnings includes Agricultural Bank of China Ltd., Industrial & Commercial Bank of China Ltd., Bank of China Ltd., Bank of Communications Co., Air China Ltd., Country Garden Holdings, Citic Securities Co. and Great Wall Motor Co.
“Analysts are revising up their earnings,” said Audrey Goh, senior cross-asset strategist for Standard Chartered Wealth Management, speaking about Chinese equities on Bloomberg Television. “Consumption, fixed asset investments as well as even the distressed property sector are starting to show some signs of life and recovery.”
Elsewhere in markets, oil held its first drop in three sessions as lagging US diesel demand overshadowed a disruption to shipments from Turkey. Gold fell for a second day and Bitcoin hovered above $28,000.
Key events this week:
- Eurozone economic confidence, consumer confidence, Thursday
- US GDP, initial jobless claims, Thursday
- Boston Fed President Susan Collins and Richmond Fed President Thomas Barkin speaks at event. Treasury Secretary Janet Yellen also speaks, Thursday
- China PMI, Friday
- Eurozone CPI, unemployment, Friday
- US consumer income, PCE deflator, University of Michigan consumer sentiment, Friday
- ECB President Christine Lagarde speaks, Friday
- New York Fed President John Williams speaks, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.1% as of 12:16 p.m. Tokyo time. The S&P 500 rose 1.4%
- Nasdaq 100 futures fell 0.2%. The Nasdaq 100 rose 1.9%
- Japan’s Topix fell 0.9%
- Australia’s S&P/ASX 200 rose 0.9%
- Hong Kong’s Hang Seng fell 0.6%
- The Shanghai Composite fell 0.3%
- Euro Stoxx 50 futures rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro fell 0.1% to $1.0833
- The Japanese yen rose 0.1% to 132.68 per dollar
- The offshore yuan fell 0.1% to 6.9022 per dollar
- The Australian dollar was little changed at $0.6678
Cryptocurrencies
- Bitcoin rose 0.4% to $28,493.87
- Ether fell 1% to $1,785.84
Bonds
- The yield on 10-year Treasuries advanced one basis point to 3.57%
- Japan’s 10-year yield rose 1.5 basis points to 0.315%
- Australia’s 10-year yield advanced five basis points to 3.34%
Commodities
- West Texas Intermediate crude fell 0.4% to $72.70 a barrel
- Spot gold fell 0.3% to $1,958.43 an ounce
This story was produced with the assistance of Bloomberg Automation.
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