Thursday 28 Mar 2024
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TOKYO/NEW YORK (Jan 23): Asian stocks looked set to follow their U.S. counterparts lower as rising pessimism that trade tensions with China will persist helped send technology and multinational companies tumbling. Treasuries climbed, oil fell and the dollar steadied.

Futures in Japan and Hong Kong pointed to losses and Australian shares opened lower after all major U.S. benchmarks declined. Chipmakers dropped more than 3 percent, with every member of the Philadelphia Semiconductor Index in the red. 

The S&P 500 briefly pared losses after presidential adviser Lawrence Kudlow said a Financial Times report that the U.S. canceled a preliminary meeting with Chinese officials was untrue. After the close of U.S. trading, Senate Majority Leader Mitch McConnell scheduled a vote for Thursday on Democratic-backed legislation to reopen the government, the first sign of a possible way out of the shutdown.

“Investors obviously are still a little bit edgy and therefore we would expect periods of volatility to continue,” said Mark Hackett, chief of investment research at Nationwide Funds Group, which manages $60 billion. “As the headlines continue to get more nerve wracking with regards to a global slowdown and trade wars and government shutdowns, it’s easy to spook investors, but we think those are temporary versus permanent.”

After many risk assets kicked off the year with a rally, investors now find their conviction tested anew as a familiar litany of concerns weigh on sentiment. The IMF’s dour forecast for global growth, fears of slowing momentum in China and uncertainty over trade are all combining to spook markets. At the World Economic Forum in Davos, billionaire investor Ray Dalio chastised monetary policy makers for an “inappropriate
desire” to tighten faster than the capital markets could handle.

Earlier, the Stoxx Europe 600 Index dipped after Switzerland’s UBS Group AG delivered disappointing results. The pound rose after U.K. data showed the jobs market remains
resilient.

These are some events investors will be watching out for in the coming days:

* Earnings season is in full swing: IBM, United Technologies, Texas Instruments, and Ford are among companies posting results this week.

* The World Economic Forum, the annual gathering of global leaders in politics, business and culture, continues in Davos, Switzerland.

* There are monetary-policy decisions for the Bank of Japan (Wednesday), the Bank of Korea and the European Central Bank (both Thursday).

And these are the main moves in markets:

Stocks

* Nikkei 225 futures fell 0.8 percent in Osaka.

* S&P/ASX 200 fell 0.4 percent.

* S&P 500 futures fell 0.1 percent. The S&P 500 Index fell 1.4 percent, while the Nasdaq Composite Index tumbled 2 percent.

* The Stoxx Europe 600 Index declined 0.4 percent.

* The MSCI Emerging Market Index declined 0.8 percent.

Currencies

* The Bloomberg Dollar Spot Index rose less than 0.1 percent, the sixth consecutive gain.

* The euro was little changed at $1.1360.

* The British pound increased 0.5 percent to $1.2957.

* The Japanese yen gained 0.3 percent to 109.36 per dollar.

Bonds

* The yield on 10-year Treasuries sank five basis points to 2.74 percent, the largest decline in more than a week.

* Germany’s 10-year yield fell two basis points to 0.24 percent, the biggest fall in a week.

Commodities

* West Texas Intermediate crude declined 1.9 percent to $53.00 a barrel, the largest drop in more than a week.

* Gold rose 0.7 percent to $1,285 an ounce.

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