Breaking News

Asia stocks retreat from 1-month high as Fed tempers rally

Stock MarketsNov 09, 2018 06:59
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. A man in a business building is reflected on an electronic stock quotation board outside a brokerage in Tokyo

By Shinichi Saoshiro

TOKYO (Reuters) - Asian stocks pulled back from a one-month high on Friday as the Federal Reserve looked set to deliver another interest rate hike next month, paring gains made earlier this week after U.S. midterm elections triggered a global equities rally.

Spreadbetters expected European stocks to follow Asia's lead and open lower, with Britain's FTSE (FTSE) losing 0.45 percent, Germany's DAX (GDAXI) slipping 0.3 percent and France's CAC (FCHI) dipping 0.15 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) fell 1.3 percent and was headed for a loss of more than 1 percent for the week. On Thursday, the index hit its highest level since Oct. 8.

Hong Kong's Hang Seng (HSI) lost 2.4 percent and the Shanghai Composite Index (SSEC) fell 1.2 percent.

Australian stocks (AXJO) slipped 0.1 percent, South Korea's KOSPI (KS11) edged down 0.05 percent and Japan's Nikkei (N225) shed 1.05 percent.

The Fed held interest rates steady on Thursday but remained on track to continue gradually raising borrowing costs, pointing to healthy economic prospects that were marred only by a dip in the growth of business investment.

The central bank has hiked U.S. interest rates three times this year and is widely expected to do so again next month.

The S&P 500 (SPX) lost 0.25 percent and the Nasdaq (IXIC) shed 0.53 percent on Thursday after the Fed's statement, and energy stocks were the biggest drag on the S&P as U.S. crude oil prices fell. (N)

Wall Street shares spiked midweek following the U.S. midterm elections, on a relief rally as the vote did not deviate significantly from investor expectations.

"The Fed meeting outcome and its statement did not produce major surprises, but it managed to reinforce views that a rate hike is coming in December and this tempered equities," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

"The Fed statement came after a steep surge in equities and gave the markets an opportunity to sell into the rally."

In currency markets, the dollar stood tall after advancing against its peers overnight, buoyed by higher Treasury yields and the Fed's intent to continue tightening monetary policy.

The dollar traded at 113.925 yen after brushing a five-week high of 114.09 overnight.

The euro dipped 0.15 percent to $1.1346 (EUR=) after shedding 0.55 percent the previous day.

The euro's and yen's declined helped the dollar index against a basket of six major currencies (DXY) gain 0.75 percent on Thursday. It last stood little changed at 96.764.

After the Fed statement, the two-year Treasury yield rose to 2.977 percent, the highest in 10-1/2 years.[US/]

China's yuan slipped to an eight-day low of 6.9497 per dollar in onshore trade , highlighting the diverging monetary policy outlooks for China and the United States.

The U.S.-China trade row also remained in focus.

"Trump's administration will likely maintain a hawkish stance towards China, even though the Republicans lost the House during the midterm elections," wrote Raymond Yeung, ANZ's chief economist for greater China.

Crude oil prices struggled near eight-month lows as investors focused on swelling global crude supply, which is increasing faster than many had expected. [O/R]

The market took stock of record U.S. crude production and signals from Iraq, Abu Dhabi and Indonesia that output will grow more quickly than expected in 2019.

U.S. crude futures (CLc1) were down 0.08 percent at $60.62 per barrel after falling to $60.40 the previous day, the lowest since March 14.

Three-month copper on the London Metal Exchange fell 0.5 percent to $6,122.5 a tonne.

Copper fell 2.5 percent this week, poised for its biggest weekly loss since mid-August, pressured by a stronger greenback, which makes it more costly for non-U.S. buyers of dollar-denominated commodities. [MET/L]

Asia stocks retreat from 1-month high as Fed tempers rally

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email