© Reuters Coronavirus Outbreak (Covid-1) Outbreaks appear to be exacerbated during September, 2021, when a man wearing a protective mask looks at an electronic board outside Japan’s Nikkei Index in Tokyo, Japan.
Written by Alun John
HONG KONG (Reuters) – Asian stocks lost ground on Wednesday, and were set for their worst quarter since the coronavirus epidemic hit, amid concerns over economic growth in China and fears of a global recession and a stronger dollar to dampen equity markets.
The dollar reached an 18-month high against the yen in Asian hours and remained stable at a 10-month high compared to other major peers after overnight gains, boosting U.S. Treasury yields in recent times, which also helped the U.S. equity market.
Doubts about a global recovery are re-emerging as the US Federal Reserve prepares to reduce stimulus and the administration of US President Joe Biden is stuck in controversial debt ceiling talks that could shut down the government. At the same time, China is embroiled in a power crisis that has affected economic production there.
Outside of Japan, MSCI’s Asia-Pacific stock index fell 0.84% and is down 9.4% in the third quarter, its worst quarterly performance since the first three months of 2020, when global markets were buoyed by Kovid’s initial expansion. .
The benchmark in South Korea fell by 1.3%, Australia by 1.2% and the Chinese blue chip by 0.6%, although Hong Kong rose by 0.5%.
The U.S. fell 2.12% overnight after the country’s ruling party voted for a new leader who would be the next prime minister in a few weeks before the general election.
Futures suggested that the risk-friendly mood could later return to the top with US stock futures, 0.51%, pan-region 0.36% higher and futures trading.
One reason for the mood swings in Asia was China’s growing power crisis, which drove investors out of risky Chinese stocks, including chemicals and steelmaking, even as the country’s almighty economic planning agency tried to reassure residents and businesses.
Energy problems follow instability in China’s property sector as investors closely watch the fate of troubled developer Evergrand and regulatory changes in education and technology, with some observers suggesting authorities want to get changes when economic growth was reasonably strong.
Alan Wang, Portfolio Manager at Greater China Equities, Principal Global Investors, said, “I think the window will close in the next month or two because GDP could be negatively surprised … and there could be employment problems.”
“When the government sees these numbers, they may start to change their behavior, or extend some time.”
Shares of Evergrand rose 10.8% when it said it planned to sell 9.99 billion yuan (1.5 1.5 billion) worth of shares in Shenzhen Bank, but investors are still waiting to see if the cashless developer will pay interest on a dollar on Wednesday. Bonding.
Overnight, the three major U.S. stock indexes have slipped nearly 2% or more, with interest rate sensitive technology and technology-related stocks being the hardest hit by bond yields, as investors began to change price names. ()
The benchmark 10-year rate gained 25 basis points in five sessions but fell 1.5392% in Asian hours, their highest since mid-June the previous day.
“We think (10-year Treasury yields) could be around 1.5% to 1.75%, so obviously they still have room to go,” said Daniel Lam, senior cross-asset strategist at Standard Chartered (OTC :).
Lam said the reason for the increase in yields is that the United States is almost certainly going to reduce its massive resource purchases by the end of this year.
The previous day, oil prices had reached a three-year high. The barrel fell 1.8% to .6 77.67 and fell 1.75% to .9 73.97. [O/R]
Gold rose spot spot prices to 1, 1,739.5 an ounce, up 0.4% from the previous week’s seven-week low as higher yields hit demand for non-interest bearing assets.