Shares in Asia struggled for traction on Thursday after US stocks ticked higher and Treasuries fell on data showing US consumers expect inflation to persist.
Equities slid in Australia, while those in Hong Kong and China fluctuated and South Korean shares gave up earlier gains. Japanese markets are closed for a holiday.
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Country Garden Holdings surged in Hong Kong, following news that Beijing included the builder and other distressed developers in a draft list of builders eligible for financial support, the latest move to plug an estimated $446 billion shortfall needed to ease the housing crisis. A gauge of property stocks rallied 7%, set for its best week since early September.
The S&P 500 rose 0.4% Wednesday ahead of the Thanksgiving holiday, resuming a November rally that has lifted the index around 8%, on track for its best month since July last year. US futures were little changed in early Asian trading.
Treasuries fell Wednesday, weighing on Australian and New Zealand government bond yields in Asian trading. Trading is Treasuries will be closed due to holidays in Japan and the US.
Wednesday selling in Treasuries pushed the two-year and five-year yields three basis points higher. The increase in yields reflected fresh data showing Americans expect inflation to climb at an annual rate of 4.5% over the next year, up from the 4.4% expected earlier in the month, according the University of Michigan.
Despite the rise in Treasury yields, the longer-term downward trend for rates will help stocks and bonds rally into the coming year, according to Audrey Goh, Head of Asset Allocation and Thematic Strategy for the Wealth Management Group at Standard Chartered Bank.
“We do expect the stock market rally to continue,” Goh said in an interview on Bloomberg Television. “If you look at inflation, that clearly has moderated so that will allow the Fed to stand pat. Our expectation is that policy rates have peaked.”
Rising US yields helped the dollar, which rose against major currencies Wednesday, staunching a decline from earlier in the week. Asian currencies were muted Thursday with the yen steady at above 149 per dollar after weakening in the prior session.
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In Asia, Indonesia’s central bank is expected to keep its benchmark interest rate steady. Data set for release include Taiwan industrial production and Singapore consumer prices.
Elsewhere, reports showed some market participants are wary of reconnect with the Industrial & Commercial Bank of China following a cyberattack that affected trading. The lender’s shares slipped early Thursday.
Origin Energy will ask investors to vote on a revised A$19.1 billion ($12.5 billion) offer from a Brookfield Asset Management-led group next month, postponing a planned meeting after proxy results showed the existing proposal would fail.
Oil extended losses in Asia after falling close to 1% in the previous session on news that the OPEC+ group of oil producing countries would delay a meeting, reducing the likelihood of an imminent production cut to buoy prices.
Key events this week:
- Eurozone S&P Global Manufacturing & Services PMI, Thursday
- Thanksgiving holiday — US markets closed — Thursday
- ECB publishes account of October policy meeting, Thursday
- Germany IFO business climate, Friday
- US S&P Global Manufacturing PMI, Friday
- Black Friday, traditional kick-off for the US holiday shopping season
- ECB’s Christine Lagarde speaks, Friday
Some of the main moves in markets:
- S&P 500 futures were little changed as of 1:13 p.m. Tokyo time
- Australia’s S&P/ASX 200 fell 0.6%
- Hong Kong’s Hang Seng fell 0.4%
- The Shanghai Composite rose 0.2%
- Euro Stoxx 50 futures were little changed
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.2% to $1.0905
- The Japanese yen rose 0.3% to 149.12 per dollar
- The offshore yuan rose 0.2% to 7.1492 per dollar
- Bitcoin fell 0.9% to $37,297.29
- Ether fell 1.1% to $2,059.34
- Australia’s 10-year yield advanced four basis points to 4.49%
- West Texas Intermediate crude fell 1.2% to $76.18 a barrel
- Spot gold rose 0.3% to $1 996.81 an ounce
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