Stocks in Asia range-bound as treasuries decline: markets wrap

Equities slid in Australia, Hong Kong and China, while those in South Korea edged higher. Japanese markets are closed for a holiday. 

Chinese developers rose on news that Beijing included distressed builders Country Garden Holdings and Sino-Ocean Group in a draft list of builders eligible for financial support, the latest move to plug an estimated $446-billion shortfall needed to ease the housing crisis. A gauge of property stocks is on track for its best week since early September.

The S&P 500 rose 0.4% on Wednesday, ahead of the Thanksgiving holiday, resuming a November rally that has lifted the index around 8%, on track for its best month since July last year. US futures were little changed in early Asian trading.

Treasuries fell on Wednesday, weighing on Australian and New Zealand government bond yields in Asian trading. The market for cash Treasuries in Asia will be closed given Japan’s holiday.

The selling in Treasuries pushed the two-year and five-year yields three basis points higher. The increase in yields reflected fresh data showing Americans expect inflation to climb at an annual rate of 4.5% over the next year, up from the 4.4% expected earlier in the month, according to the University of Michigan.

Despite the Wednesday rise in Treasury yields, the longer-term downward trend for rates will help stocks and bonds rally into the coming year, according to Audrey Goh, head of asset allocation and thematic strategy for the Wealth Management Group at Standard Chartered Bank. 

“We do expect the stock market rally to continue,” Goh said in an interview on Bloomberg Television. “If you look at inflation, that clearly has moderated so that will allow the Fed to stand pat. Our expectation is that policy rates have peaked.”

Rising US yields helped the dollar, which rose against major currencies Wednesday, staunching a decline from earlier in the week. Asian currencies were muted Thursday with the yen steady at above 149 per dollar after weakening in the prior session.

In Asia, Indonesia’s central bank is expected to keep its benchmark interest rate steady. Data set for release include Taiwan industrial production and Singapore consumer prices.

Elsewhere, reports showed some market participants are wary of reconnecting with the Industrial & Commercial Bank of China Ltd. following a cyberattack that affected trading. The lender’s shares slipped early Thursday.

Origin Energy Ltd. will ask investors to vote on a revised A$19.1-billion ($12.5 billion) offer from a Brookfield Asset Management-led group next month, postponing a planned meeting after proxy results showed the existing proposal would fail.

Oil extended losses in Asia after falling close to 1% in the previous session on news that the OPEC+ group of oil producing countries would delay a meeting, reducing the likelihood of an imminent production cut to lift prices.