(Correct the bank name in paragraph 7 to ING)
HONG KONG / WASHINGTON (Reuters) – Asian stocks reversed previous gains on Tuesday, dragged down by falls in Chinese markets, which were shaken by a new round of sanctions after fears of inflation helped boost broader sentiment in the region.
Investors are now awaiting an appearance in Congress overseen by U.S. Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen.
The negative sentiment seems to weigh on European equities as EUROSTOXX 50 futures fall 0.42% and FTSE futures 0.61%.
Futures S&P 500 fell 0.28%.
MSCI’s broader Asia-Pacific stock index outside of Japan fell 0.76%, hurt by a 1.42% drop in Chinese blue chips.
The United States and others, including the European Union, on Monday sanctioned Chinese officials for human rights abuses in Xinjiang, and Beijing attacked with punitive measures against European lawmakers, diplomats, institutes and families.
“The drop could be due to sanctions,” Iris Pang, China’s chief economist at ING Wholesale Banking, said. “More international policy pressure will affect asset markets.”
Jin Jing, an analyst at China Fortune Securities, said the sanctions hurt the appetite for risk, particularly for foreign investors, who sold shares through Stock Connect.
Persistent concerns about tightening policies at home also continued to weigh on sectors and stocks with high ratings with high ratings, as investors became cautious.
Hong Kong’s Hang Seng index also fell 1.62%, with traders’ attention to a Baidu market debut, in which the shares of the Chinese technology giant were virtually unlisted above their price. secondary contribution.
Beyond China, Asian stocks were mixed. Japan fell 0.61% and Australia fell 0.11%, both of which had previously tracked overnight gains on Wall Street, but emerging markets in the region performed better.
The Dow Jones Industrial Average rose 0.32%, the S&P 500 gained 0.70% and the Nasdaq Composite added 1.23%, helped by a drop in Treasury yields.
10-year benchmark banknotes last produced 1.6717%, down from 1.732% on Friday afternoon.
Powell said in statements prepared for a hearing in Congress that the U.S. recovery had advanced “faster than generally expected and looks set to strengthen.”
“Last week, the FOMC made it clear what the Fed’s vision is for rates … the next thing the markets will focus on is perhaps getting some details from Yellen regarding new infrastructure investments.” , said Alex Wolf, chief investment strategist for Asia at JP Morgan Private Bank, referring to a statement from the Federal Open Market Committee.
The dollar gained slightly compared to a basket of six major currencies that recently traded at 91,887, after falling 0.32% on Monday as it advanced against the kiwi, Australian and pound sterling.
The New Zealand dollar hit a three-month low after the government introduced taxes to curb housing speculation, a move investors estimated could allow the central bank to keep interest rates lower for longer with less risk of real estate bubble.
Oil also fell amid widespread supply and concern that new pandemic limits and the slow deployment of vaccines in Europe are holding back fuel recovery.
Intermediate futures on crude oil from the western US of Texas
(This story corrects paragraph 7 of the bank name in ING)
Report by Alun John in Hong Kong Chris Prentice in Washington; Additional reports from Luoyan Liu in Shanghai; Edited by Sam Holmes and Gerry Doyle