Asian Stocks Fall on China Concerns, Yen Rises: Markets Wrap
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(Bloomberg) -- Asian equities fell as concerns about China’s economic outlook persisted while the yen snapped a three-day losing streak to edge higher.
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The MSCI Asia Pacific Index headed for a fourth day of declines as equities in China and South Korea retreated. Japan’s Finance Minister Katsunobu Kato said he sees one-sided, rapid moves in the currency market after the yen slumped over 1% against the dollar on Wednesday.
Benchmark 10-year US yields dropped two basis points, partly erasing the prior session’s increase when it hit the highest level in almost three months. Oil prices rebounded after retreating on Wednesday as traders assessed tensions in the Middle East and the outlook for market balances heading into 2025.
China’s economic outlook remains a concern as traders assess whether the government’s recent stimulus blitz will be enough to revive growth. The upcoming US election and the pace of Federal Reserve easing are also on investors’ radar, with swap traders now less than 100% certain of rate cuts over the two remaining policy meetings this year.
“There is still some doubt whether the stimulus changes things fundamentally,” Vanessa Xu, chief investment officer at VS Partners, told Bloomberg TV. The very large price swings in Chinese stocks in recent weeks reflects “a tug of war between tourist money and serious long money,” she said.
Over in the US, the presidential contest between Donald Trump and Kamala Harris could hardly be tighter, with the candidates statistically tied among likely voters in each of the seven swing states in the Bloomberg News/Morning Consult poll.
“The price of options to hedge against Treasury losses is soaring,” said Andrew Brenner at NatAlliance Securities. “In the US, it is about the election and potential sweep. That is what is being built into the rate structure, which is giving the vigilantes the green light. It will reverse, but it might take a severe employment number or a surprise in the election.”
Elsewhere, Taiwan Semiconductor Manufacturing Co. halted shipments to a client after discovering that chips made for that client ended up with Huawei Technology Co., potentially violating US sanctions. In South Korea, SK Hynix Inc.’s shares gained after the firm posted record quarterly profit and revenue.