50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

Asia shares sit at 2021 lows ahead of Fed decision, China steadies

Published 07/28/2021, 12:16 AM
Updated 07/28/2021, 02:51 AM
© Reuters. FILE PHOTO: TV camera men wait for the opening of market in front of a large screen showing stock prices at the Tokyo Stock Exchange in Tokyo, Japan October 2, 2020. REUTERS/Kim Kyung-Hoon
US500
-
DJI
-
JP225
-
HK50
-
MSFT
-
JPM
-
GOOGL
-
AAPL
-
LCO
-
ESH25
-
CL
-
IXIC
-
US10YT=X
-
STOXX
-
GOOG
-
LFST
-
BTC/USD
-

By Alun John

HONG KONG (Reuters) - Asian equities looked set for a fourth straight day of losses on Wednesday as a storm in Chinese equity markets rippled across the region, boosting safe-haven currencies ahead of a Federal Reserve policy meeting.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.91%, though markets in Hong Kong and mainland China saw milder losses after a sharp sell-off in the previous sessions.

U.S. stock futures, the S&P 500 e-minis, were down 0.26%, pan-region Euro Stoxx 50 futures dropped 0.11%, and FTSE futures fell 0.3%.

Asian shares have fallen in each of the three previous sessions as broadening regulatory crackdowns in China roiled stocks in the technology, property and education sectors, leaving international investors bruised.

Chinese state-run financial media urged calm on Wednesday morning, and while Chinese shares swung back and forth in early trading, they did not repeat the sharp plunges seen earlier in the week.

Chinese blue chips were last 0.46% lower, having had a volatile day, and the Hong Kong benchmark gave up early gains to fall 0.82%. Both were pinned around eight-month lows.

The embattled Hang Seng Tech Index also gave up early gains to fall 0.4%, a day after touching its lowest level since the index's creation in July 2020. It is down over 40% from its February high.

Japan's Nikkei slid 1.73%, with shares in SoftBank Group, a major investor in Chinese tech, falling 4.7%.

"China and the Fed are the two key things for today," said Tai Hui, chief market strategist for Asia Pacific, at JPMorgan (NYSE:JPM) Asset Management.

"We are still trying to digest the news from China, what's going to be new is how the Fed view the latest round of (COVID-19) infections and whether they need to readjust their view," he said.

The statement from the Fed policy meeting is due at 2 p.m. EDT (1800 GMT), with a news conference by Chairman Jerome Powell expected a half hour later.

Markets will be watching closely for any hints on when the Fed will start reducing its purchases of government bonds and any fresh insight into its views on inflation and economic growth.

The declines in Asian equities on Tuesday spread to other markets overnight, causing Wall Street to retreat a little from the record highs set earlier in the week.

The Dow Jones Industrial Average ended Tuesday down 0.2%, the S&P 500 shed 0.5% and the Nasdaq Composite slid 1.2%. (N)

After the U.S. close, Google parent Alphabet (NASDAQ:GOOGL) Inc, Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL) all reported record quarterly earnings, though the smartphone maker's shares slid in after-hours trading on the back of a slower growth forecast.

In currency markets, things were fairly quiet in Asian trading hours, with the U.S. dollar sitting below recent highs after a month-long rally.

The safe-haven yen held onto earlier gains and the risk-sensitive Australian and New Zealand dollars dropped back, but while analysts at CBA attributed the earlier moves to falling risk sentiment on the back of the Chinese regulatory crackdown, they said market participants were now turning their attention to the Fed.

© Reuters. FILE PHOTO: TV camera men wait for the opening of market in front of a large screen showing stock prices at the Tokyo Stock Exchange in Tokyo, Japan October 2, 2020. REUTERS/Kim Kyung-Hoon

The yield on benchmark 10-year Treasury notes was little changed from the U.S. close at 1.236% compared to 1.234%.

Oil prices rose as industry data showed U.S. crude and product inventories fell more sharply than expected last week, outweighing worries that surging COVID-19 cases would curb fuel demand. U.S. crude rose 0.56% to $72.05 a barrel and Brent crude rose 0.36% to $74.81 per barrel. Gold strengthened, with spot prices above the key psychological level of $1,800, while Bitcoin rose around 1.3%, trading either side of $40,000.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.