Asian stocks mixed ahead of U.S. inflation test

Written by on November 9, 2021

November 9, 2021

By Julie Zhu

HONG KONG (Reuters) -Asian shares were mixed and U.S. treasury yields slipped on Tuesday as markets, boosted by the weekend passage of a long-delayed $1 trillion U.S. infrastructure bill, awaited the release of inflation data from the United States.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2%. Japan’s Nikkei stock index slid 0.68% while Australian shares were down 0.24% as losses in the financial sector offset early gains among heavyweight mining stocks.

Elsewhere in Asia, China’s blue-chip CSI300 index lost 0.2% as lingering worries about the real estate sector’s liquidity woes weighed on property stocks. Hong Kong’s Hang Seng index was down 0.11%.

The highest-ranking members of the Chinese Communist Party have gathered in Beijing since Monday and are set to green-light another term for President Xi Jinping.

Meanwhile, a think-tank of China’s state council held a meeting with real estate developers and banks on Monday, with developers urging state companies to help private firms improve liquidity.

“The sentiment of the entire market is relatively low today. More investors are taking a wait-and-see approach amid and ahead of major events, waiting for more policy direction,” said Zhang Zihua, chief investment officer at Beijing Yunyi Asset Management.

European share markets were set for a softer open, with pan-region Euro Stoxx 50 futures down 0.41%, German DAX futures off 0.31% while FTSE futures dropped 0.39%. U.S. stock futures, the S&P 500 e-minis, were down 0.22%.

On Monday, Wall Street’s benchmark S&P 500 index and the Nasdaq extended their run of all-time closing highs to eight straight sessions, while the blue-chip Dow notched its second consecutive record closing high.

A 4.9% decline in Tesla Inc shares however weighed on the S&P 500. Tesla fell after Chief Executive Elon Musk’s Twitter poll on whether he should sell about 10% of his stock in the electric automaker. The poll garnered more than 3.5 million votes, with 57.9% voting “Yes”.

World shares also rose on Monday after hitting a record high last week as relatively dovish central bank messages and strong U.S. labour data on Friday added to optimism generated by a healthy earnings season on both sides of the Atlantic.

But a tight U.S. labour market and the dislocation in global supply chains could result in a high reading for consumer prices on Wednesday. Strong inflation likely would rekindle talk of Federal Reserve raising interest rates earlier than expected.

“Although Chair Powell maintains the Fed can be patient with regards to rate hikes, with measures of underlying inflation and wages intensifying and broadening, the clock is ticking on how long the it can hold that line,” ANZ analysts said in a note.

U.S. Treasury yields dipped after Randal Quarles, who served as the U.S. Federal Reserve’s vice chair for supervision and most powerful bank regulator until last month, announced Monday he will step down as a bank governor at year’s end.

The yield on benchmark 10-year Treasury notes touched 1.4741% compared with its U.S. close of 1.497% on Monday. The two-year yield fell to 0.4148% compared with a U.S. close of 0.449%.

The dollar index, which tracks the greenback against a basket of six currencies, was down at 93.919.

Oil prices remained steady as the passage of the U.S. infrastructure bill and China’s export growth supported the outlook for energy demand.

Saudi Arabia’s state-owned producer Aramco also raised the official selling price for its crude.

U.S. crude dipped less than 0.1% to $81.86 a barrel. Brent crude stood at $83.31 per barrel.

Gold was slightly lower. Spot gold was traded at $1,823.1742 per ounce. [GOL/]

(Editing by Lincoln Feast)


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