SINGAPORE (Reuters) – Asian stocks fell Tuesday and retreated from record highs as persistent concerns about possible roadblocks from the Biden administration’s $ 1.9 trillion weighed on sentiment, pushing U.S. Treasury yields to low three. weeks.
The lower risk appetite gave some support to the dollar against a basket of currencies, while oil prices fell slightly.
EUROSTOXX 50 futures eased 0.1%, while FTSE futures added 0.03%, indicating mixed opening to European equity markets. E-Mini futures for the S&P 500 ESc1 were down 0.5%.
In a sea of red that was all over the markets, South Korea and Hong Kong were the losers, each falling more than 2%, Japan fell 0.9% and Chinese stocks lost 1.6%. All reached milestone highs earlier this month.
“There were some warning bells from various parts of the world as we have seen more lockdowns in Europe, the US and Asia,” said Vasu Menon, senior investment strategist at OCBC Bank Wealth Management.
MSCI’s widest index of Asia-Pacific stocks outside Japan fell 1.5% to 717.3, but was not far from a record high on Monday and is still up 8% so far this year. The index was on track to record its largest decline since late November.
“You have to see the delivery in terms of economic data, on the revenues, and on enough vaccines to be distributed,” Menon said, adding that uncertainty over the timing of the US stimulus package hurt market sentiment.
Waning tensions in the Taiwan Strait and South China Sea also added to reasons for caution in Chinese markets, where a jump in small-cap short betting also caught the attention of regulators.
A flood of money supply, ultra-low or zero interest rates and the introduction of COVID-19 vaccines have sparked a ‘buy it all’ rally in recent months.
Some investors – pointing to skyrocketing prices of assets like bitcoin or, on Monday, the soaring share price of close-tweak video game retailer Gamestop – are starting to worry that markets are entering the bubble area.
US lawmakers agreed that getting COVID-19 vaccines to Americans should be a priority, even if they closed the horns on the magnitude of a pandemic relief package.
Disagreements have led to months of indecision in a country with more than 175,000 COVID-19 cases per day with millions of people unemployed.
On Monday, the Nasdaq index hit a new peak, but the Dow Jones Industrial Average index fell. [.N]
“We suspect that earnings this year may not catch up with what people expect,” said Jacob Doo, chief investment officer at Envysion Wealth Management, referring to the lockdowns in Europe and the slow introduction of vaccines in the United States.
“Within the tech space, we are now cautious about FANGS simply because there could be antitrust laws that Biden would implement,” Doo said.
The focus will also shift to the Federal Reserve’s meeting of the Federal Reserve’s Open Market Committee on Tuesday and Wednesday.
“We expect the January FOMC to reiterate and reinforce the Fed’s existing moderation, which is still significant given recent winding down talks and other central banks’ considerations to change policy,” said Ebrahim Rahbari, FX strategist. at CitiFX, in a report.
The dollar rallied to its nearly a week high against a basket of currencies as stock volatility reduced investor interest in riskier currencies. The euro fell to $ 1.2127. [USD/]
Benchmark 10-year US Treasury yields fell a fraction to return to Monday’s low in three weeks, with the latter trading at 1.0381%. [US/]
Brent crude oil fell 0.7% to $ 55.50 a barrel, after a nearly 1% rise on Monday. [O/R]
Reporting by Anshuman Daga; edited by Shri Navaratnam and Richard Pullin