Asian stocks fall even further, the dollar remains strong

HONG KONG, Aug 20 (Reuters) – Asian stocks extended losses on Friday from the 2021 low set a day earlier, while the dollar maintained its recent gains at a nine-month high.

MSCI’s broader Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) fell 0.75%, with Chinese blue chips (.CSI300) up 1.22% and Hong Kong (.HSI) ) 0.53%.

The Japanese Nikkei (.N225) fell 0.53% and US stock futures, the S&P 500 e-minis, fell 0.26%.

A day earlier, Asian and European stock markets and oil fell sharply and the dollar rose to nine-month highs after the prospect of a reduction in Federal Reserve bond purchases scared investors.

This also pushed the dollar to its highest level since early November, gains it maintained on Friday.

The dollar index, which measures the currency against six rivals, varied little from the previous day, to 93,517 on Friday.

“The recent weakness in Asian equity markets is driven in part by the strengthening of the US dollar as the market prepares for the gradual reduction of the monetary stimulus,” said Fan Cheuk Wan, director of HSBC’s Asia investments for private banking.

The strong dollar will maintain the volatility of Asian equity markets, so we need to wait for the clarity of Jackson Hole, ”he added.

The U.S. Federal Reserve will hold its annual research conference in Jackson Hole, Wyoming, next week. Fed Chairman Jerome Powell will deliver a speech looking for clues about the central bank’s next steps.

On Friday, traders are also expected to assess the thinking of Chinese policymakers as the country will set its benchmark loan rate.

A Reuters poll showed that China is expected to keep the rate unchanged for the 16th month in a row, but some traders and analysts believe a cut may be needed soon, among signs that the country’s economic recovery is losing strength , showed a Reuters poll.

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On Wall Street, stocks ended the mixed day, with defensive and technological stocks regaining ground after two days of losses. The Dow Jones industrial average (.DJI) fell 0.19%, while the S&P 500 (.SPX) rose 0.13% and the Nasdaq Composite (.IXIC) added 0.11%.

Oil prices continued to fall. US crude fell 2.57% to $ 63.78 a barrel. Brent crude was flat at $ 66.42.

U.S. Treasury yields were fairly quiet in Asian hours. The yield on 10-year Treasury notes was last 1.24367% compared to the close in the United States of 1.242% on Thursday.

Gold has also stabilized after Thursday’s falls; the spot price was $ 1783.0649 per ounce, up 0.16%.

Edited by Stephen Coates

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