Asia Stocks Mixed, Treasuries Pare Drop; Oil Rises: Markets Wrap




  • In Business
  • 2021-12-03 00:26:28Z
  • By Bloomberg
 

(Bloomberg) -- Asian stocks were mixed Friday as traders evaluated risks from the omicron virus strain, while Treasury yields pared a climb spurred by Federal Reserve comments about a quicker reduction in stimulus.

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Equities fluctuated in Japan, fell in South Korea and rose in Australia. China and Hong Kong face headwinds: Chinese shares traded in the U.S. slid over the risk of delisting for flouting disclosure rules, while developer Kaisa Group Holdings Ltd. failed to win approval for a debt swap, highlighting property-sector woes.

U.S. futures retreated, continuing a choppy week for investors. Dip buyers returning to U.S. stocks sensitive to the economic outlook fueled the S&P 500's best climb since October.

Treasury yields dipped, retracing some of their jump in the U.S. on Thursday. Fed officials laid out the case for a faster removal of policy support amid high inflation. The dollar was steady. Crude was higher after OPEC+ proceeded with an output hike but left room for quick adjustments.

Volatility in financial markets remains elevated, reflecting the Fed's shift toward less generous monetary settings and uncertainty about how the omicron outbreak will affect global reopening. Some worries about the new strain have receded in the hope that vaccines will remain effective or can be adjusted.

"The environment in markets is changing," Steven Wieting, chief investment strategist at Citigroup Private Bank, said on Bloomberg Television. "Monetary policy, fiscal policy are all losing steam. It doesn't mean a down market. But it's not going to be like the rebound, the sharp recovery that we had for almost every asset in the past year."

Fed Views

Fed Governor Randal Quarles, Atlanta Fed President Raphael Bostic and his San Francisco counterpart Mary Daly explained the rationale for tapering bond purchases more rapidly. That reinforced a similar message from Chair Jerome Powell this week.

Treasury Secretary Janet Yellen said she understands the "reasoning" behind the central bank's plans to reduce asset purchases.

In the latest U.S. data, jobless claims remained low, suggesting additional progress in the job market. Traders are awaiting the payrolls report Friday, which could shape expectations for the pace of Fed policy tightening.

Delisting Risk

Meanwhile, the U.S. Securities and Exchange Commission on Thursday announced its final plan for putting in place a new law that mandates foreign companies open their books to U.S. scrutiny or risk being kicked off the New York Stock Exchange and Nasdaq within three years.

China and Hong Kong are the only two jurisdictions that refuse to allow the inspections despite Washington requiring them since 2002.

Elsewhere, Grab Holdings Ltd., Southeast Asia's biggest ride-hailing and delivery company, sank in its first day of U.S. trading after completing its merger with Altimeter Growth Corp., the largest deal yet for a special-purpose acquisition company.

Key events to watch this week:

  • U.S. jobs report, factory orders, durable goods on Friday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

  • S&P 500 futures slid 0.3% as of 9:13 a.m. in Tokyo. The S&P 500 rose 1.4%

  • Nasdaq 100 futures lost 0.4%. The Nasdaq 100 rose 0.7%

  • Japan's Topix index rose 0.1%

  • Australia's S&P/ASX 200 index added 0.2%

  • South Korea's Kospi shed 0.5%

  • Hang Seng futures fell 0.7% earlier

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was at $1.1305

  • The Japanese yen was at 113.00 per dollar, up 0.1%

  • The offshore yuan was at 6.3740 per dollar

Bonds

  • The yield on 10-year Treasuries fell about one basis point to 1.43%

  • Australia's 10-year yield fell four basis points to 1.64%

Commodities

  • West Texas Intermediate crude rose 0.8% to $67.02 a barrel

  • Gold was at $1,770.14 an ounce, up 0.1%

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©2021 Bloomberg L.P.

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