Stocks
Asian markets extend losses with Wall St as rate hopes dim
Asian markets fell Thursday, with traders tracking losses on Wall Street fuelled by concerns over rising Treasury yields and fading hopes for US interest rate cuts.
The losses in equities extended a more than week-long sell-off that came on the back of forecast-beating data and warnings from Federal Reserve officials that they were in no rush to lower borrowing costs.
A second straight day of weak demand in a Treasuries auction forced yields — a proxy for interest rates — to extend a recent advance.
Traders are now focusing on the release Friday of the crucial personal consumption expenditures (PCE) index, the Fed’s preferred gauge of inflation, hoping for signs that prices are being brought under control enough to allow officials to ease monetary policy.
The central bank’s “Beige Book” survey of the world’s top economy suggested the outlook had become gloomier, with discretionary spending cooling and consumers more sensitive to costs in recent weeks.
It also said job gains were largely modest to negligible.
The report provided a little hope that the Fed’s tight policy stance was having some effect, though with inflation still stubbornly well above its two percent target, rate-cut hopes remain dimmed.
Still, Cantor Fitzgerald’s Eric Johnston said the latest spike in Treasury yields might not be entirely down to sticky prices.
“Bond yields may be moving higher mainly due to supply of bonds and the continued massive deficit — and not because of a concern around inflation or strong economy,” he said.
All three main indexes retreated in New York, with the Dow off more than one percent.
And Asia again followed the US lead.
Tokyo gave up more than one percent, while there were also losses in Hong Kong, Shanghai, Singapore, Seoul, Wellington, Taipei, Manila and Jakarta.
Sydney was in the red, with mining giant BHP giving back around 1.5 percent after giving up on its proposed $49-billion takeover of British rival Anglo American, which would have been one of the biggest in the industry and created a copper titan.
Hopes for a softening of the Fed’s monetary policy have been weighed by comments from a succession of decision-makers saying they wanted to see more data convincing them that inflation was on its way back to two percent.
The latest was Atlanta Fed chief Raphael Bostic, who saw a cut potentially coming at the end of the year, though many of the indicators he closely watched were moving in the right direction.
“My outlook is that if things go according to what I expect — inflation goes slowly, the labour market slowly and orderly moves back into a sort of a weaker stance, but a stable-growth stance,” he told a conference.
“I’m looking at the end of the year, the fourth quarter, as the time where we might actually think about and be prepared to reduce rates.”
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 1.5 percent at 37,974.47 (break)
Hong Kong – Hang Seng Index: DOWN 0.7 percent at 18,353.13
Shanghai – Composite: DOWN 0.1 percent at 3,108.62
Dollar/yen: DOWN at 157.36 from 157.70 yen on Wednesday
Euro/dollar: DOWN at $1.0797 from $1.0804
Pound/dollar: DOWN at $1.2694 from $1.2702
Euro/pound: UP at 85.07 from 85.03 pence
West Texas Intermediate: FLAT at $79.24 per barrel
Brent North Sea Crude: UP 0.1 percent at $83.68 per barrel
New York – Dow: DOWN 1.1 percent at 38,441.54 (close)
London – FTSE 100: DOWN 0.9 percent at 8,183.70 (close)
Reviewing the U.S. Stock Markets, the Nasdaq Composite, recorded a decent loss of 1,023 points, reaching a closing value of 16,690 points by the end of the week. Similarly, the S&P 500 index showed a positive trend, losing 240 points to settle at 5,408 points. Meanwhile, DJIA Index experienced a notable hike, adding 1,218 points during the week and concluding at 40,345 points after a week of gaining.
In contrast, Russell 3000 Index saw a loss in week performance, with a slight drop of 141 point to reach 3,077 points by the end of the week.
Moving to Russell 2000 Index, demonstrated a notable lost of 126 points, ending the week at 2,091 points.
In the Outgoing week, the European stock market displayed a mixed performance.
Here is the data on the weekly performance of the European Stock Market, The STOXX Europe 600 index, which is considered a leading benchmark for the European market and covers approximately 90 percent of the market capitalization across 17 countries, reported a loss of 18.49 points to close at 506.56.
The United Kingdom’s FTSE 100, one of the most widely followed indices in Europe, also showed a significant drop, losing 195 points or finishing the session at 8,181.
In Germany, the DAX 30 index, added by 605 points to reach 18,301, while France’s CAC 40 decreased by 278 points to stop at 7,352 at the end of the trading day.
Italy’s FTSE MIB, which covers the top 40 stocks traded on the Milan Stock Exchange, decreased by 1,081 points to 33,291. However, Spain’s IBEX 35, lost by 228 points, to close at 11,173.
A review of South Asian stock markets shows that India’s Bombay Stock Exchange (BSE) index BSE Sensex has lost 1,182 points during the week. At the end of the week, the index stood at 82,365 points. On the other hand, the Nifty-50 index of the country’s National Stock Exchange dropped by 383 points last week. At the end of the week, the index stood at 24,852 points.
Pakistan Stock Exchange Index ‘KSE 100’, added 459 points last week. After a week of losing, the index settled at 79,002 points.
On the other hand, The Sri Lankan stock market index loss, and the Colombo Stock Exchange index ‘ASPI’ decreased by 94 points in a week. After a week the index settled at 10,775 points.
Bhutan’s stock market index ‘BSI’ dropped by 9 points hence the index stood at 1,500 points throughout the whole week. Nepal’s ‘NEPSE’ lost 22 points, therefore the index stands at 2,727 points.
Hence Dhaka Stock Exchange: The benchmark index ‘DSEX’ lost by 75.77 points or 1.31 percent, in the outgoing week. At the end of the week, the index stands at 5,728 points.
