Asian shares fell on the last trading day before Christmas 

Asian Shares
  • Hong Kong, Chinese stocks among worst performers on tightening
  • Crude oil drops as most government bond yields head higher

Asian shares fell on the last trading day before Christmas as Chinese equities extended their losses amid concerns over rising borrowing costs in the world’s two biggest economies. The greenback halted its rally and oil slid.

The MSCI Asia-Pacific Index excluding Japan headed for a second weekly decline as Hong Kong stocks slid and the yuan weakened. Markets in Tokyo were closed for a holiday. The Bloomberg Dollar Spot Index stalled after rising 0.3 percent Thursday and government bonds mostly gained. The Dow Jones Industrial Average retreated for a second day after failing to breach 20,000.

“Hong Kong stocks are troubled by capital outflows,” said Ben Kwong, executive director at KGI Asia Ltd. in Hong Kong.

The lack of confidence in Asian equities is a sharp contrast from the previous quarter, when traders were betting Britain’s vote to leave the European Union would spur more global central bank easing. Instead, the U.S. Federal Reserve raised borrowing costs this month, while China has tightened monetary conditions. Data on U.S. durable goods orders showing increased business activity may reinforce bets on economic strength that sent the dollar to near a 14-year high against the euro.

Stocks

  • The MSCI Asia Index excluding Japan slid 0.4 percent as of 2:19 p.m. in Singapore, with Australia’s S&P/ASX 200 Index down 0.3 percent and Singapore’s Straits Times Index losing 0.2 percent.
  • Hong Kong’s Hang Seng Index lost 0.6 percent, while China’s CSI 300 Index fell 1 percent.
  • A gauge of Chinese property stocks fell for a 10th day, poised for its longest losing streak since August 2015
  • The S&P 500 Index declined for a second day on Thursday, losing 0.2 percent, and the Dow fell 0.1 percent.
  • Billionaire investor Carl Icahn said he was concerned about the U.S. stock market “in the short term” given its run-up following Trump’s win, adding that he has increased his hedging.
  • Orders for U.S. business equipment advanced more than forecast last month, while the final reading of third-quarter gross domestic product topped estimates.

Bonds

  • Treasury futures were weaker after U.S. bonds fell Thursday, taking 10-year yields up by two basis points to 2.55 percent.
  • Australian bonds slid, pushing the 10-year yield four basis points higher to 2.87 percent, while the rate on similar-dated kiwi notes climbed three basis points to 3.48 percent.
  • U.S. mortgage rates rose, with the 30-year reaching the highest level since April 2014, after the Fed increase.

Currencies

  • The Korean won led declines in Asian emerging currencies, losing 0.2 percent, while the yuan slid 0.1 percent with the the rupiah. The Bloomberg Dollar Spot index was little changed as the euro and yen both gained around 0.1 percent.
  • “Going into next year, we are confident the dollar will continue to make headway,” said Andrew Milligan, head of global strategy at Standard Life Investments Ltd. in Edinburgh. “It will be the currency that appreciates in 2017, it’s just a question of how much.”

Commodities

  • West Texas Intermediate crude oil declined 0.5 percent to $52.68 a barrel.
  • Gold traded near the lowest level in 10 months as exchange-traded funds holding the metal saw a 29th day of contraction.

Source: Bloomberg

Leave a Comment


Broker Cyprus TopFX