Asia Stocks Drop as China Losses Deepen; Yen Falls: Markets Wrap 

• Pound holds advance after May calls surprise general election
• Iron ore gains after sharp losses this week, commodities rise

Asian stocks fell as losses in Chinese equities deepened, following weakness in the U.S. amid worse-than-expected corporate earnings. The pound held gains triggered by the surprise news of a U.K. election.

Equity markets from Sydney to Hong Kong and Seoul posted declines of at least 0.5 percent. A Chinese gauge of small-cap shares headed for its lowest close since September 2015. The yen weakened while the pound remained near its strongest level this year ahead of a parliamentary vote for an election on June 8. The yield on Japan’s benchmark 10-year government note touched zero. Zinc, aluminum and iron-ore prices rose.

Uncertainty coupled with weaker-than-expected results from heavyweights IBM and Goldman Sachs Group Inc. has pushed some investors away from riskier assets like stocks and into havens including Treasuries and the yen. A vote in Britain will be preceded by the French presidential election, while a standoff over North Korea’s nuclear weapons program drags on.

Here’s what investors are watching:

• The first round of voting in France starts this weekend. Theresa May will Wednesday ask the House of Commons to support her call for a June general election.
• Final euro area inflation figures for March are out Wednesday.
• Morgan Stanley will publish earnings Wednesday. Akzo Nobel NV will also report results and may outline its plan to counter the $24 billion takeover attempt by PPG Industries Inc.
• The Fed’s Beige Book will provide more color on the U.S. economy.

Here are the main moves in markets:

Stocks

• The Shanghai Composite Index fell 1 percent to the lowest level since February as of 12:51 p.m. in Tokyo. The gauge is down 3.4 percent over four days. The ChiNext gauge of small-cap shares headed for its lowest close since September 2015.
• The Hang Seng Index slid 0.7 percent, while the Hang Seng China Enterprises Index dropped 1 percent to below the 10,000 level for the first time in two months.
• Japan’s Topix index was little changed. The MSCI Asia Pacific Index retreated 0.4 percent.
• Australia’s S&P/ASX 200 Index lost 0.7 percent and South Korea’s Kospi index fell 0.5 percent.
• Futures on the S&P 500 rose 0.1 percent after the underlying gauge slipped 0.3 percent Tuesday. IBM slumped in after-hours U.S. trading after its 20th consecutive quarterly sales decline.

Currencies

• The yen slipped 0.1 percent to 108.58 per dollar, after gaining 0.5 percent on Tuesday. The Bloomberg Dollar Spot Index rose 0.1 percent, following a two-day decline.
• The pound was steady at $1.2831 after its 2.2 percent surge Tuesday. The euro was also little changed.
• The South Korean won was little changed, erasing an earlier advance.

Bonds

• The yield on 10-year Treasuries rose one basis point to 2.18 percent after an eight-basis-point plunge Tuesday.
• The yield on similar-dated Japanese bonds declined one basis point to zero, while the yield on Australian notes due in a decade slid four basis points to 2.45 percent.

Commodities

• London Metal Exchange zinc for delivery in three months rebounded, advancing 0.8 percent to $2,547 per metric ton. Aluminum, copper, lead and nickel all rose.
• Iron ore put the brakes on its decline, rising 1.7 percent after losing 8 percent in the first two days of the week.
• Gold declined 0.2 percent to $1,286.65 an ounce.
• West Texas Intermediate crude oil dropped 0.2 percent to $52.30 a barrel, after falling for two days.

Source: Bloomberg

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