SINGAPORE (Reuters) – Asian stocks fell on Tuesday, pulling off record highs as persistent concerns about possible obstacles to the $ 1.9 trillion stimulus from the Biden administration weighed on sentiment, dragging on U.S. Treasury yields to lows of three weeks.
The lower risk appetite gave some support to the dollar against a basket of foreign exchange, while oil prices fell.
EUROSTOXX 50 futures relaxed 0.1%, while FTSE futures added 0.03%, indicating a mixed opening for European stock markets. Future E-Minis for the S&P 500 ESc1 are down 0.5%.
In a red sea seen in the markets, South Korea and Hong Kong outperformed losers and fell more than 2% each, Japan fell 0.9% and Chinese stocks fell 1.6%. They all hit record highs earlier this month.
“There have been some warning bells from different parts of the world as we have seen more blockages in Europe, the US and Asia,” said Vasu Menon, senior investment strategist at OCC Bank Wealth Management.
MSCI’s broader Asia-Pacific stock index outside of Japan fell 1.5% to 717.3, but it was not far from a record reached on Monday and has still risen a 8% so far this year. The index was on track to record its biggest drop since late November.
“We need to see delivery on the front of economic data, profits and the distribution of enough vaccines,” said Menon, who added that uncertainty about the timing of the U.S. stimulus package was hurting market sentiment. .
Gradual tensions in the Taiwan Strait and the South China Sea also added to the precautionary reasons in Chinese markets, where it has also caught the attention of regulators a leap in short-term small capital bets. .
A flood of money supply, extremely low or zero interest rates and the deployment of COVID-19 vaccines have led to a concentration of “buy it all” in recent months.
Some investors, who point to rising asset prices like bitcoin or, on Monday, the stock price of Gamestop video game retail, are starting to worry that markets are entering bubble territory.
U.S. lawmakers agreed that getting COVID-19 vaccines to Americans should be a priority, even when blocking horns above the size of a pandemic relief package.
Disagreements have led to months of indecision in a country that suffers from more than 175,000 COVID-19 cases a day with millions out of work.
On Monday, the Nasdaq index climbed a new high, but the Dow Jones Industrial Average index fell. [.N]
“We suspect that revenue will not be able to keep up with what people expect this year,” said Jacob Doo, investment director at Envysion Wealth Management, citing blockades in Europe and the slow deployment of vaccines in the United States. United States.
“Within the technology space, we are now cautious about FANGS, simply because there could be antitrust laws that Biden would implement,” Doo said.
The focus will also be shifted to the Federal Reserve Federal Open Market Committee meeting on Tuesday and Wednesday.
“We expect the January FOMC to repeat and reinforce the Fed’s existing weakness, which is still significant given recent reduced discussions and considerations by other central banks to adapt policy,” said Ebrahim Rahbari, FX strategist by CitiFX.
The dollar advanced to a one-week high compared to a basket of currencies, as stock volatility undermined investors ’appetite for riskier currencies. The euro fell to $ 1.2127. [USD/]
10-year U.S. Treasury yields fell a fraction to retreat to a three-week low on Monday, with a recent operation of 1.0381%. [US/]
Brent crude fell 0.7% to $ 55.50 a barrel after rising nearly 1% on Monday. [O/R]
Report by Anshuman Daga; edited by Shri Navaratnam and Richard Pullin