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market | IST

Asian shares down, set for worst month since March 2020

Asian shares slipped on Friday, with a gauge of regional equities set for its biggest monthly drop since the height of global pandemic lockdowns last March, while the dollar lagged near one-month lows on expectations of continued Fed stimulus.

Asian shares slipped on Friday, with a gauge of regional equities set for its biggest monthly drop since the height of global pandemic lockdowns last March, while the dollar lagged near one-month lows on expectations of continued Fed stimulus.
But the stock market losses were moderate compared with sharp falls earlier in the week that had been sparked by investor fears over the impact of regulatory actions in China against the education, property and tech sectors.
Reassurances from Chinese regulators and official media have helped to soothe investors' nerves, as have statements from the US Federal Reserve that its bond-buying programme will remain unchanged for now. The US posted strong second-quarter growth helped by rising vaccinations and government aid, but the expansion fell short of expectations.
Robust US earnings and forecasts also helped to lift Wall Street to record intraday highs on Thursday.
On Friday, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.84 percent, taking its losses for the week to more than 6.5 percent. Japan's Nikkei dipped 1.71 percent, set for an 11th straight month of falls on the last trading day in the month.
Chinese blue-chips fell 0.96 percent, and Hong Kong's Hang Seng fell 1.27 percent, with tech stocks once again dragging. The Hang Seng Tech index deepened its losses for the week to more than 17 percent. Seoul's Kospi was last down 0.94 percent on the day.
"Its clear investors are very rattled by the regulatory crackdown," said Michael Frazis, portfolio manager at Frazis Capital Partners in Sydney, adding that the market continues to face other near-term pressure.
"You will have to talk about tapering, and you do have a lot of coronavirus beneficiaries which are largely in the tech sector. Growth will be slow, and they will be reporting numbers off of very high bases for this time last year... We expect tech indices to be challenged in the near term, but we're very optimistic over the medium and long term."
Lower-than-expected revenue reported by Amazon.com Inc on Thursday, and the company's forecast of slower sales growth in the coming quarters weighed on US stock futures early in the Asian trading day.
NASDAQ e-mini futures slid 1.35 percent and S&P 500 e-minis were down 0.82 percent.
After rising Thursday on US economic growth data, US Treasury yields pulled back, particularly toward the long end of the yield curve.
Benchmark 10-year notes last yielded 1.2509 percent, down from 1.269 percent late on Thursday, and the 30-year yield stood at 1.9001 percent, down from 1.916 percent on Thursday.
The spread between the US 10-year and 2-year yields narrowed to 104.5 basis points.
"We think bond yields now discount an unduly pessimistic view of the medium- to long-term outlook... The prospects for a robust recovery - and higher bond yields - are arguably much better," analysts at Capital Economics said in a client note.
But following Fed Chairman Jerome Powell's statement earlier this week that rate increases are "a ways away" and the job market still had "some ground to cover", the dollar wallowed near one-month lows on Friday and was set for its worst week since May.
The dollar index was last up 0.09 percent at 91.967, with the euro down slightly at USD 1.1879. The greenback was barely higher against the yen at 109.50.
In commodities markets, oil prices fell back after global benchmark Brent topped USD 76 a barrel on tight US supplies.
Brent was down 0.53 percent at USD 75.65 per barrel and US West Texas Intermediate crude traded down 0.52 percent at USD 73.24.
Spot gold was flat at USD 1,827.94 an ounce.