Business Maverick

Business Maverick

Stocks in Asia Pare Drop; U.S. Futures Advance: Markets Wrap

Pedestrians are reflected in a window as they walk past an electronic stock board at the ASX Ltd. exchange centre in Sydney, Australia. Photographer: David Moir/Bloomberg

Asian stocks came off their lows Friday after a wave of selling in the wake of a Wall Street rout triggered by concerns about the speed of the epic rally.

Japanese and Australian shares were down about 2% after paring steeper losses. Hong Kong and Shanghai were more modestly lower. U.S. futures suggested some stabilization, rising after the S&P 500 sank almost 6% Thursday, the most in 12 weeks, with only one company in the index finishing higher. Treasury yields headed for the first gain this week, while the dollar held an overnight advance. Crude built on this week’s slide.
S&P 500 posts worst loss since March after falling for third day

In the U.S. Thursday, airlines, cruise and travel shares that had soared in recent weeks bore the brunt of the selling. The KBW Bank Index of financial heavyweights slid 9%, and energy producers joined a rout in oil.

While much of the equity selling owed to the frantic pace of the recent rally, sentiment did sour as signs mounted of a possible second wave of the pandemic. Houston, the fourth-largest American city, is girding for a resurgence. Still, Treasury Secretary Steven Mnuchin said the U.S. shouldn’t shut down the economy again even if there is another jump in coronavirus cases.

“Certainly there are going to be some second-wave concerns so it is right for the market to be worried about that,” Lori Heinel, deputy global chief investment officer, said on Bloomberg TV at State Street Global Advisors. “We also had seen an incredible rally from the bottom so the idea that investors might be looking to take some profits here is certainly what’s driving the sell-off as well.”

As restrictions lift across the U.S., more than 2 million people have now been infected. The localized surges have raised concerns among experts even as the nation’s overall case count early this week rose just under 1%, the smallest increase since March.

Elsewhere, crude oil edged lower and is on course for its first weekly decline since April.

These are some of the main moves in markets:

Stocks

  • Futures on the S&P 500 rose 1.1% as of 11:48 a.m. in Tokyo. The index sank 5.9% Thursday.
  • Japan’s Topix Index dropped 1.8%.
  • Australia’s S&P/ASX 200 Index retreated 1.5%.
  • Kospi Index fell 2.3%.
  • Hang Seng fell 1%.
  • Shanghai Composite fell 0.5%.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.1% after surging 1.2% Thursday.
  • The yen was little changed at 106.84 per dollar.
  • The offshore yuan was flat at 7.0828 per dollar.
  • The euro bought $1.1291.

Bonds

  • The yield on 10-year Treasuries was at 0.69% after sliding six basis points Thursday.
  • Australian 10-year yields fell about four basis points to 0.88%.

Commodities

  • West Texas Intermediate crude decreased 2.1% to $35.59 a barrel.
  • Gold dipped to $1,726.12 an ounce.
Gallery

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