Asian stocks were mixed Thursday as investors assessed the impact of skyrocketing energy costs on inflation, and weak China data. The dollar pared an advance.
Japanese shares slipped as the ruling party’s new leader, who is set to become the next prime minister, is seen by investors as maintaining stability. China edged up ahead of a week-long holiday, while Hong Kong fell. US and European futures climbed. The Nasdaq 100 notched its third straight day of losses after a technology rally petered out. Dip buyers helped push the S&P 500 higher.
Treasury yields remained around the highest since June. Federal Reserve Chair Jerome Powell and his counterparts in Japan, Europe and the UK voiced cautious optimism that supply-chain disruptions lifting inflation rates around the world would ultimately prove temporary.
China’s factory activity contracted in September for the first time since the pandemic began last year, a sign of the damage a widespread electricity crunch is having on an already slowing economy.
Investors are finishing the third quarter concerned about global growth amid inflationary pressures, a looming energy crisis, supply chain bottlenecks and regulatory risks emanating from China. A majority harbor fears of persistently high inflation, with a 20% pullback in stocks seen as more likely than a 20% rally, according to a Citigroup Inc. survey of clients. Global stocks are poised to decline for the first quarter in six.
“Growth has clearly hit an airpocket here with concerns about Covid, with the drama going on in Washington right now, the Chinese property sector that has sent tremors to global markets,” Christopher Smart, Barings chief global strategist, said on Bloomberg Television. “Having said that, the general trajectory of the global economy remains very much where it was earlier this year.”
Meanwhile, Chinese authorities appeared to remain committed to stabilising the rapidly cooling housing market, another signal they want to avoid any fallout from the debt crisis at China Evergrande Group. Separately, two holders of an Evergrande dollar bond with a coupon due Wednesday said they hadn’t received payment.
In the US, Senate Majority Leader Chuck Schumer said Wednesday lawmakers had reached an agreement to avoid a government shutdown on Friday, extending government spending until December 3.
Elsewhere, oil was little changed after declining and Bitcoin jumped to above $43 000.
Here are some events to watch this week:
- House Financial Services Committee hearing on the Fed, Treasury’s pandemic response, Thursday
- Univ. of Michigan sentiment, ISM manufacturing, U.S. construction spending, spending/personal income, Friday
Some of the main moves in markets:
- S&P 500 futures rose 0.6% as of 7 a.m. in London. The S&P 500 rose 0.2%
- Nasdaq 100 futures rose 0.7%. The Nasdaq 100 fell 0.1%
- Topix index fell 0.4%
- Australia’s S&P/ASX 200 Index rose 1.5%
- Kospi index rose 0.4%
- Hang Seng Index fell 0.5%
- Shanghai Composite Index rose 0.8%
- Euro Stoxx 50 futures gained 0.5%
- The Japanese yen was at 111.86 per dollar
- The offshore yuan traded at 6.4723 per dollar
- The Bloomberg Dollar Spot Index dipped 0.2%. It climbed 0.7% earlier
- The euro was at $1.1602
- The yield on 10-year Treasuries were at 1.52%
- Australia’s 10-year bond yield was at 1.49%
- West Texas Intermediate crude was at $74.66 a barrel, down 0.2%
- Gold was at $1 732.28 an ounce, up 0.3%