Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Market / Stock-market-news/  Asian stocks slip as China rout intensifies, dollar weak
BackBack

Asian stocks slip as China rout intensifies, dollar weak

China share index down 6% as rout continues; investors cautious ahead of Greece referendum on Sunday

MSCI’s broadest index of Asia-Pacific shares outside Japan fell more than 1% in early trading while Japan’s Nikkei stock index slipped 0.4%, positioning it to shed more than 1% for the week. Photo: AFP Premium
MSCI’s broadest index of Asia-Pacific shares outside Japan fell more than 1% in early trading while Japan’s Nikkei stock index slipped 0.4%, positioning it to shed more than 1% for the week. Photo: AFP

Hong Kong: Asian stocks fell on Friday as China’s stocks plunged and growing caution before Greece’s weekend referendum prompted investors to cut risky bets, while disappointing US employment data weighed on the dollar.

In early trade, stocks in Shanghai slumped more than 6%, taking total losses to nearly 30% since a peak on 12 June. The rout in China’s stock markets has wiped out trillions of dollars of market capitalization in Shanghai and Shenzhen’s stock markets.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell more than 1% in early trading while Japan’s Nikkei stock index slipped 0.4%, positioning it to shed more than 1% for the week.

“Some of the stocks which have seen bubbly valuations in China have been the hardest hit in this selloff, and risk sentiment is broadly under pressure ahead of the weekend referendum," said the head of equities trading at a European fund in Hong Kong.

China’s tech-heavy ChiNext index which had more than doubled to be the world’s hottest stock market, is down nearly 40% from this year’s highs.

With US markets closed on Friday in observance of Independence Day, market watchers will have plenty of time to mull the weak overnight employment data and its implications for monetary policymaking.

Employers hired 223,000 workers last month, fewer than the 230,000 increase forecast by economists polled by Reuters. The government also downgraded its reading on April and May job growth.

Investors had been hoping that solid improvement in the labour market would reinforce expectations that the US Federal Reserve will raise interest rates as early as September.

“It is not that market expectations have radically changed. But markets are pushing back their expectations a little bit. Some people who expected a September hike may now see a rate rise in December," said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.

US interest rate futures price gained a few ticks following the data, with a hike in December now seen as less certain than before, despite recent comments from Fed officials that interest rates will likely be raised later this year.

The 10-year US Treasuries yield was trading near the session’s lows of 2.39% from a high of 2.4% hit just before the payroll data.

Caution reigned ahead of Greece’s Sunday referendum on an international bailout deal that could ultimately determine whether it stays or not in the euro zone.

The International Monetary Fund warned on Thursday that Greece would need an extension of its European Union loans and a potentially a large debt writeoff if it cannot implement economic reforms and its growth slows.

“Investors will probably look to JPY as a risk-hedge going into the referendum," Steven Englander, global head of G10 FX strategy at Citi, said in a note to clients.

The dollar slipped after the overnight jobs data. Against the Japanese currency, it was changing hands at ¥122.95, a shade lower than Thursday’s 123.04.

The euro was also steady on the day at ¥136.42, and $1.1094.

In commodities trading, US crude fell about 0.4% to $56.71, after data from Baker Hughes showed the number of rigs drilling for oil rose by 12 this week, the first rise since December.

Iron ore prices were under pressure, with Shanghai rebar futures hitting a record low on Thursday on demand concerns.

That in turn put pressure on the Australian dollar, which stood at $0.7595. Reuters

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 03 Jul 2015, 09:41 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App