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Asian equities fall, led by China tech stocks: markets wrap

Asian stocks resumed declines on Friday after a slump in US technology stocks and more economic data validating the case for the Federal Reserve to keep hiking interest rates set a downbeat tone.

Hong Kong-listed tech shares led the falls, with a gauge of stocks in the region headed for its sixth drop in seven days. Weakness was also evident in benchmark indexes for Japan, Australia and South Korea.

Futures for the Nasdaq 100 inched higher after a 2.5% slump in the underlying measure during US trading, when sentiment was battered by a bleak outlook from chipmaker Micron Technology Inc.

An index of dollar strength was little changed. Treasury yields edged higher, adding to a move that pushed up the policy-sensitive two-year yield on Thursday. Australian and New Zealand government bond yields rose. Japan’s benchmark 10-year yield climbed slightly.

US data painted a picture of a resilient economy, stoking concern that the Fed has a longer way to go to subdue inflation. Initial jobless claims rose less than forecast in the week ended December 17, underscoring the strength in the labor market. Third-quarter gross domestic product was revised to 3.2% — compared with a previously reported 2.9% advance — on firmer spending.

Meanwhile, concerns are also growing that Japanese investors could be persuaded to bring home some of the trillions of dollars they have stashed in foreign stocks and bonds as the yen and local bond yields rise in the wake of this week’s sudden hawkish move from the Bank of Japan. That could further lift global borrowing costs and drag on already cooling economic growth, with euro zone bonds seen especially vulnerable.

Elsewhere in markets, gold little changed in Asia after falling 1.2% Thursday in the wake of the US economic data.

Oil headed for a substantial weekly gain as China’s shift from Covid Zero bolstered the demand outlook, US stockpiles fell and traders waited for Russia’s response to the Group of Seven cap on its crude.

Key events this week:

  • US consumer income, new home sales, US durable goods, PCE deflator, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.1% as of 2:02 p.m. Tokyo time. The S&P 500 closed 1.5% lower
  • Nasdaq 100 futures rose less than 0.1%. The Nasdaq 100 fell 2.5%
  • Japan’s Topix fell 0.5%
  • Australia’s S&P/ASX 200 fell 0.8%
  • Hong Kong’s Hang Seng fell 0.7%
  • The Shanghai Composite was little changed
  • Euro Stoxx 50 futures rose 0.5%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.0605
  • The Japanese yen fell 0.3% to 132.71 per dollar
  • The offshore yuan rose 0.2% to 6.9977 per dollar
  • The Australian dollar rose 0.1% to $0.6680

Cryptocurrencies

  • Bitcoin rose 0.3% to $16,836.44
  • Ether rose 0.7% to $1,223.54

Bonds

  • The yield on 10-year Treasuries advanced one basis point to 3.69%
  • Australia’s 10-year yield advanced four basis points to 3.84%

Commodities

  • West Texas Intermediate crude rose 1.1% to $78.35 a barrel
  • Spot gold rose 0.1% to $1 795.03 an ounce

© 2022 Bloomberg


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