SYDNEY (Reuters) - Stock markets stalled on Thursday and safe havens such as government bonds, gold and the yen were supported in Asia, as a hint of uneasiness crept in over the outlook for interest rates and growth, particularly outside of the United States.
Japan’s Nikkei fell 0.1%. [.T] MSCI’s broadest index of Asian shares outside Japan dropped 0.5%, dragged mostly by weakness in Hong Kong tech stocks.
S&P 500 futures were up 0.1% after the index eased a little bit on Wednesday. European futures were flat after scaling a record peak a day earlier. [.EU][.N]
“We do seem to have stalled somewhat as we head into the year end,” said Jun Bei Liu, a portfolio manager at Tribeca Investment Partners in Sydney.
“Investors perhaps are just taking a bit of pause,” she said, in the wake of a strong U.S. results season, but as inflation and China’s slowdown loom as macroeconomic headwinds.
The mood was softest in Hong Kong where concern over the earnings outlook weighed on tech and a 5% drop in heavyweight Alibaba, due to report later in the day, dragged the Hang Seng 1.3% lower. [.HK]
Ant Group and SoftBank-backed payments firm Paytm also copped a drubbing on debut in India, with shares falling 21% below the listing price in their first session.
Meanwhile, safe-haven assets hung on to most of Wednesday’s decent gains. The yen, which posted its sharpest one-day slump in three months a day ago, hovered at 114.18 per dollar. Gold sat steady at $1,866 an ounce. [GOL/]
Benchmark 10-year Treasury yields also held at 1.5906% after falling about 5.5 basis points on Wednesday. [US/]
The day ahead is quiet on the calendar, with appearances from central bankers in the United States and Europe and U.S. jobless claims data the highlights.
Against the backdrop of apparent caution is a surging U.S. dollar, as U.S. data has turned surprisingly strong just as doubts have arisen over the outlook for other major economies.
On Wednesday, figures showed a jump in building permits and the backlog of house construction rose to a 15-year high - underscoring strong demand on the heels of a better-than-expected retail sales report on Tuesday.
By contrast, Europe is grappling with a wave of COVID-19 cases and fresh restrictions to curb it, while the central bank is pushing back on pressure to raise rates.
The euro has recovered from a trip below $1.13 on Wednesday but remains shaky at $1.1317 and is braced for its worst month on the dollar since June when the Federal Reserve surprised investors with a hawkish shift in tone. [FRX/]
In emerging markets, Turkey is in near crisis and the lira flirting with a collapse through 11 per dollar as the central bank is poised to cut rates at 1100 GMT even as inflation hovers near 20%.
Currency traders are also assessing a sharp downdraft in the Aussie/yen cross, often a barometer of sentiment. It fell through its 200-day moving average on Tuesday and has lost almost 4% in a dozen sessions.
“You’ve got the perfect storm there for bears,” said Matt Simpson, senior analyst at brokerage City Index. “Fundamentally and technically Aussie/yen looks pretty good with lower oil prices.”
Copper, another barometer of growth expectations because of its range of industrial and construction uses, was also down about 2% at a five-week low in Shanghai. [MET/L]
Reporting by Tom Westbrook in Sydney; Editing by Shri Navaratnam and Sam Holmes