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Stocks drop, dollar up on inflation, China risks: markets wrap

Treasury yields rose.
Image: Kiyoshi Ota/Bloomberg

A selloff in stocks continued in Asia on Tuesday and the dollar strengthened amid caution about elevated inflation fueled by commodity prices and risks from the debt woes in China’s property sector.

MSCI Inc.’s Asia-Pacific share index tumbled as much as 1.7% before paring some losses. The energy sector was among the few to rise on a rally in crude oil. Japan’s Nikkei 225 and South Korea’s Kospi extended losses from their recent peaks to 10%, putting them on track for technical corrections. US and European futures were steady after technology shares led a Wall Street slump.

Oil held near the highest since 2014 following OPEC+’s decision to maintain a gradual supply hike even as a natural-gas crisis boosts crude demand. The Bloomberg Commodity Spot Index hit an all-time peak. Treasury yields rose.

China’s indebted property sector continues to vex traders. Fantasia Holdings Group Co. failed to repay a dollar bond due Monday, adding to the strains caused by China Evergrande Group’s cash crunch. The nation’s high-yield dollar bonds slumped. China’s stock market is closed for a holiday and will reopen Friday.

Here are some events to watch this week:

  • Rate decision in New Zealand on Wednesday
  • Reserve Bank of India monetary policy decision on Friday
  • The US Labour Department releases unemployment and job creation data Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures slipped 0.2% as of 7:15 a.m. in London. The S&P 500 fell 1.3%
  • Nasdaq 100 futures were flat. The Nasdaq 100 fell 2.2%
  • Japan’s Topix index shed 1.3%
  • Australia’s S&P/ASX 200 Index lost 0.4%
  • South Korea’s Kospi index fell 2%
  • Hong Kong’s Hang Seng Index shed 0.1%
  • Euro Stoxx 50 futures were steady

Currencies

  • The Japanese yen was at 111.12 per dollar, down 0.2%
  • The offshore yuan was at 6.4549 per dollar
  • The Bloomberg Dollar Spot Index rose 0.3%
  • The euro was at $1.1595, down 0.2%

Bonds

  • The yield on 10-year US Treasuries rose about one basis point to 1.49%
  • Australia’s 10-year bond yield rose three basis points to 1.52%

Commodities

  • West Texas Intermediate crude was at $77.64 a barrel
  • Gold was at $1 758.71 an ounce, down 0.6%
© 2021 Bloomberg

COMMENTS   1

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The more Dollars they print stronger the Dollar gets.

The more the US spends and get indebted, the stronger the Dollar gets.

I hope to see to see the $ 31 Trillion implode in my lifetime.

End of comments.

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