Asia Stocks Drop On Profit Taking, Dollar Gains: Markets Wrap
Asian shares halted a three-day rally, while the US dollar strengthened as traders took some profits following Xi-Biden’s meeting and weak housing data in China.
– Bloomberg.
The MSCI Pacific Index had declined by 0.8%, with the Chinese shares in Hong Kong leading the decline after the home prices had fallen at their most rapid clip since 2015, which underscored the hurdles for the second largest economy in the world to emerge from the economic rut.
US futures had dropped, which effectively erased the 0.2% profit in the S&P 500 on Wednesday.
Traders had also assessed the impact of the President of the United States, Joe Biden, who referred to Xi to be a dictator yet again, a comment that may have casted a shadow over the progress that both the sides had made at the summit on Wednesday in San Francisco.
“Keep in mind US equity markets are approaching overbought levels, so it feels like we have the makings of a pullback,”
said a market analyst at IG Australia. Sycamore had called Biden’s repeated comment on XI as ”punchy” but “not surprising.”
Treasuries increased in Asia post a sell-off Wednesday, where the rate for ten years had increased by eight basis points to more than 4.5%. The greenback had reversed their early loss and traded close to the high of the day after adding to the profits from the previous session, which included the yen that had weakened beyond 151 for each dollar. The much awaited Xi-Biden meeting had delivered an outcome which was largely at par with the expectations. There is “not much so far” from the discussions between the US and the Chinese presidents, but “the tone from both sides seems conciliatory and that is good,” said Redmon Wong who is a market strategist at Saxo Capital Market located in Hong Kong.
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