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Tuesday Sep 24, 2024
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MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4% after having gained 4.5% in the previous five sessions. Japan’s Nikkei fell 1.0% after 4.6% rise in the past three days.
Markets are still sitting on solid gains that stem from relief over the continuity in Fed policy, pressure coming off emerging markets.
There were still some doubts, however, over the quality of data released earlier in the week that showed import growth in China at a six-month high, with some analysts wary that the figures could be inflated by fake trade transactions to circumvent capital controls.
Yellen made it clear on Tuesday, in her first public remarks since becoming chairwoman, that she would not make any abrupt changes to monetary policy.
Adding to the positive mood, Congress approved legislation on Wednesday to increase the US Government’s debt limit for a year, avoiding chances of a repeat of the political showdown that led to government shutdown in October.
Yet recent US data, including two straight months of weak jobs growth, has raised questions over whether the world’s biggest economy can sustain the strength it showed in the second half of last year.
“There are emerging doubts about whether you can just blame all the soft data on the weather,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“Investors are a bit bewildered. While they are relieved that major events are out of the way, they are still hesitating to chase shares higher,” he added.
Doubts could intensify if further data falls short of market expectations, although traders admit there is chance the market could write off any soft reading as a one-off aberration due to the severity of the winter in the United States.
Next up on the data front are January retail sales and weekly jobless claims data, both due to be released at 1330 GMT.
On Wall Street, shares .SPX .DJI were almost flat on Wednesday after a four-day rally as investors pondered whether valuations had become stretched.
In the currency market, the British pound stood out after a surprisingly upbeat economic outlook from the Bank of England prompted markets to price in an interest rate hike in early 2015.
The sterling edged up to $ 1.6618, getting near its 2 1/2-year high of $ 1.6667 hit late last month.
In contrast, the euro slipped to $ 1.3614, pulling further away from highs of $ 1.3684 hit on Tuesday after dovish comments from a top European Central Bank official.
Executive Board member Benoit Coeure described chances that the ECB would cut into negative territory the rate paid to banks to hold their deposits overnight as “a very possible option”.
“Coeure’s comments cannot be lightly dismissed and stoke expectations for action at the March meeting,” said Sean Callow, currency strategist at Westpac in Sydney.
The Australian dollar tumbled around one percent across the board after data showed the Australian jobless rate at its highest in a decade, reviving speculation that interest rates may be cut again in coming months.
The Aussie stood at $ 0.8943, slipping from four-week high of $ 0.9068 marked on Wednesday.
World shares dip after five-day rally, Italy politics weigh in EuropeREUTERS: World shares stepped back from three-week highs on Thursday, as a five-day run of gains fuelled by assurances from major central banks about their supportive policies came to a halt. In Europe, the fading momentum was compounded by fresh political uncertainty in Italy where Prime Minister Enrico Letta defied pressure to make way for the centre-left leader Matteo Renzi. Italian stocks led the losses among the region’s bourses with a fall of 1.1%, while the country’s government bonds were the worst performers on the debt market. “Right now you are not sure which (political) scenario will be in play and some of the scenarios could lead to inaction,” said UniCredit strategist Luca Cazzulani in Milan. “Any sort of political uncertainty can be unwelcome, but it is certainly not only factor. Some people are booking profits and Italy also has bond auctions today.” A batch of disappointing updates from blue-chip companies in Europe also weighed on the region’s stock markets. In the currency market, the British pound stood out after a surprisingly upbeat economic outlook from the Bank of England prompted markets to price in an interest rate hike in early 2015. The sterling edged up to $ 1.6633 in early trading, getting near its 2 1/2-year high of $ 1.6667 hit late last month. The euro also saw a bit of a recovery to $ 1.3626, having tumbled on Tuesday after ECB Executive Board member Benoit Coeure told Reuters cutting rates and charging banks to park spare cash at the ECB was “a very possible option” and one it was looking at seriously. |
BSE Sensex falls 255 pointsREUTERS: The BSE Sensex fell 1.3% on Thursday to post its second-biggest drop this month as Cipla and Coal India slumped following disappointing earnings, while other blue chips tracked their lower global counterparts. Cipla Ltd. slumped nearly 8%, while Coal India fell 3.5%. The Sensex fell 1.3% to 20,193.35, posting its biggest one-day fall since 3 February. The index gained 0.6% over the previous two sessions. The Nifty fell 1.4% after gaining 0.5% over the previous two sessions. |
