Asian stocks slip on recovery hopes amid global rally
Asian stocks edged lower on Wednesday on lingering uncertainties regarding the global economic outlook, even as US stocks advanced to new highs.
MSCI’s index of shares outside Japan slipped 0.1 per cent, retreating slightly from a two-year high on Thursday. Japan’s Nikkei dropped 0.12 per cent.
It came after a set of mixed economic data, which showed that while new home sales in the US rose sharply in July, the average household remains squeezed. Consumer confidence in the US also plunged to a six-year low this month.
Asian stocks failed to follow up on gains made in the US session which saw the benchmark S&P 500 rise 0.36 per cent and the tech-heavy Nasdaq jump 0.76 per cent.
The Hang Seng index slipped 0.07 per cent, while the Shanghai Compsoite underperformed and was trading 1.46 per cent in the afternoon session.
The dollar steadied in currency trading, while the yield on 10-year debt rose to a two-month high of 0.7150 per cent.
As global economies start to reopen, traders still remain cautious about a second wave and remain focused on the development of a coronavirus vaccine.
Spain reported another 7,117 cases in the past day although the Prime Minister has rejected the prospect of another national lockdown. Cases in Germany are also on the rise.
Traders are also awaiting news of further fiscal stimulus in the US this week as Federal Reserve Chair Jerome Powell is due to speak at a virtual Jackson Hole symposium on Thursday.
However his announcement “may remain short of the very dovish market expectations and trigger a downside correction at the current levels”, says Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
The commodity markets were buoyed by movements in oil, which jumped to a five-month peak as Hurricane Laura disrupted output in the Gulf of Mexico.
Brent crude and WTI rose to post-pandemic highs of $46.02 and $43.35 respectively as the hurricane led to worries over potential fuel shortages.