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.
PHILO PHOTO: Tokyo Stock Exchange (TSE) Employees Work on Tokyo Stock Exchange Japan, October 11, 2018. REUTERS / Issei Kato
MSCI’s broadest index of shares in Asia-Pacific outside Japan slipped 1.24%. FS stock futures, the S&P 500 e-minis, were down 0.61%.
Australian shares fell 1.04% 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 0.8%, and Japanese shares slid 0.77%. South Korean shares tumbled 2.11% amid a spike in coronavirus cases in Seoul.
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 slowing.
The downbeat tone spilled over into Asia, which weighed on equities and oil futures but pushed gold prices slightly 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.”
The previous Cooling Wall Street rally was minutes of the Fed’s July meeting of the Fed, which showed that the rapid rebound in employment seen in May and June was likely to 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.
Wall Street shares retreated and were later lowered on Fed news. The Dow Jones Industrial Average fell 0.31%, the S&P 500 lost 0.44% and the Nasdaq Composite fell 0.57%.
Spotgold rose 0.51% to $ 1,939.28 per ounce in Asia on Thursday, recovering from a 3.6% tumble on Wednesday when the cautious vote increased the demand for the safe harbor advantage. [GOL/]
The benchmark yield on 10-year Treasury notes fell slightly to 0.6623%, while those on the 20-year bond also fell to 1.1708% in Asia.
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, rose in Asia to 93,042.
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 0.75% to $ 45.03 per barrel. US crude futures slipped 0.96% to $ 42.52 a barrel.
Report by Chibuike Oguh in New York; Edited by Sam Holmes and Jacqueline Wong
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