Asian Stocks Set for Steady Open on Growth Caution: Markets Wrap

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Asian stocks looked set for a steady start Friday as traders weigh the prospect of reduced central bank stimulus as well as challenges to economic reopening from the delta coronavirus variant.

Futures for Japan, Australia and Hong Kong pointed to modest gains. U.S. contracts fluctuated after the S&P 500 posted its longest losing streak since June. Reports showed lower U.S. jobless claims but also more virus disruption, including Microsoft Corp.’s move to scrap plans to fully reopen its offices.

Treasuries climbed amid the mood of caution and strong demand at a 30-year bond auction. The dollar was little changed in early Asian trading. In commodities, oil slid after China decided to tap crude reserves to ease a surge in energy costs. A broad rally in base metals markets gathered pace.

The Nasdaq Golden Dragon China Index edged lower after a bruising tumble in Chinese technology companies in Asia. Beijing’s crackdown on a range of private industries as well as possible steps to cushion the second-largest economy remain in focus for traders.

Equities slipped this week and Asia remains far behind developed markets

Investors have become wary of a backdrop of elevated inflation and slower economic reopening alongside looming reductions in central bank support. The European Central Bank said it will slow the pace of its pandemic bond-buying in the final quarter of 2021, but President Christine Lagarde added that didn’t herald a winding down in stimulus with the delta strain still posing risks.

There’s “a general feeling in the market that growth is slowing down in the U.S.,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “There’s concern that what’s happening with the delta variant is impacting consumer behavior, potentially business behavior,” he said.

President Joe Biden said he’ll order all executive branch employees, federal contractors and millions of health-care workers to be vaccinated against the coronavirus. His administration will also issue rules requiring large private employers to mandate shots or testing.

Stocks

  • S&P 500 futures were steady as of of 7:51 a.m. in Tokyo. The S&P 500 fell 0.5%
  • Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.4%
  • Nikkei 225 futures were up 0.2%
  • S&P/ASX 200 futures rose 0.3%
  • Hang Seng futures climbed 0.6%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was at $1.1824
  • The offshore yuan was at 6.4499 per dollar
  • The Japanese yen was at 109.78 per dollar

Bonds

  • The yield on 10-year Treasuries declined four basis points to 1.30%
  • Australia’s 10-year yield fell two basis points to 1.25%

Commodities

  • West Texas Intermediate crude was at $67.92 a barrel, down 0.3%
  • Gold was at $1,794.74 an ounce
Source Bloomberg

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