Asian stocks fall, gold jumps to dead Fed

TOKYO / NEW YORK (Reuters) – Asian stocks and US futures fell Thursday, hurt by the US Federal Reserve’s cautious view of the economy, tensions with China and new clusters of coronavirus infections.

MSCI’s broadest index of shares in Asia-Pacific outside Japan slipped 1.79%, the largest daily decline in five weeks. US-active futures were down 0.55%.

Australian shares fell 0.91% due to concerns that ties with China will further increase after a report that Australian regulators will reject purchases by a Chinese company.

Shares in China fell 1.28% as a result of growing expectations for further monetary contraction after the People’s Bank of China held a benchmark loan on Thursday.

Japanese shares slid 1.06%. South Korean shares tumbled 3.26%, the largest daily decline since June 15, amid a spike in coronavirus cases in Seoul.

Euro Stoxx 50 futures were down 1.36%, German DAX futures were down 1.31%, and FTSE futures were down 1.27%.

Market sentiment was Bullish until the comments of Fed policymakers highlighted ambiguities about the recovery of the US, with the S&P 500 and the Nasdaq hitting the heights largely by Apple Inc.

Shares of the iPhone maker rose 1.4% to reach the first publicly traded US company of $ 2 trillion in market capitalization, while strong results from retailers Target and Lowe’s also lifted sentiment.

However, the positive mood quickly disappeared, after several Fed members said that additional approval might be needed because a rebound in employment was already slower.

The downbeat tone spilled over into Asia, which weighed on equities and oil futures but pushed gold prices higher due to economic uncertainty.

“It was a decent day for banks, Apple and Nike, but everything else was upside down after the Fed said economic conditions would be difficult for a while,” said Jamie Cox, managing partner at Harris Financial Group.

“We have seen some good figures from the retail sector, but there is uncertainty that these companies will not replicate this revenue without some incentive.”

Minutes from the Fed’s July meeting of the Fed showed that the rapid rise in employment in May and June was likely to be slow and that additional “substantial improvement” in the labor market would depend on a “broad and sustained” resumption. of business activity.

The announcement of Fed discussions hints at further action that the US Federal Reserve could take in September. No change in interest tax policy is expected until the end of 2021.

The Dow Jones Industrial Average fell 0.31%, the S&P 500 lost 0.44% and the Nasdaq Composite fell 0.57%.

Spotgold rose 0.82% to $ 1,945.43 per ounce on Thursday, recovering from a 3.6% tumble on Wednesday as cautious sentiment boosted demand for safe haven assets. [GOL/]

Yield on benchmark 10-year Treasury notes fell slightly to 0.6623%, while those on the 20-year bond also fell to 1.1725%.

Some bond investors were also disappointed after the Fed minutes showed that central bankers were limiting the chance of taking up bonds.

The dollar index, which reflects the value of the greenback against six leading brands, stood at 92,983.

Oil prices fell lower over prolonged concerns of weak global demand for fuel after data showed that U.S. crude supplies fell 1.6 million barrels last week.

Brent crude futures fell 0.77% to $ 45.02 per barrel. US crude futures slipped 0.89% to $ 42.55 a barrel.