Asia stocks follow US lower as oil, dollar stall
SINGAPORE, Dec 23 — Asia-Pacific shares fell on the last trading day before Christmas, after US stocks declined with Treasuries amid a flurry of data that bolstered optimism in the American economy.
The greenback halted its rally and oil slid.
The MSCI Asia-Pacific Index excluding Japan dropped for an eighth session, its longest series of losses since May, while markets in Tokyo were closed for a holiday.
Australia’s S&P/ASX 200 Index slid for the first time in five days, while Hong Kong and Chinese equities declined and Korea’s Kospi Index was steady.
The Dow Jones Industrial Average fell to 19,920 yesterday, a day after climbing within 14 points of 20,000, while the Bloomberg Dollar Spot Index stalled after rising 0.3 per cent yesterday.
Gold gained and crude oil retreated.
Data on durable goods orders showing increased business activity may reinforce bets that Donald Trump’s fiscal stimulus plans will stoke growth.
Speculation the President-elect will open the spigot of spending has sent the dollar to near a 14-year high against the euro and pushed the Dow Jones Industrial Average to almost 20,000 this week.
Japanese markets are closed today for a public holiday.
“Going into next year, we are confident the dollar will continue to make headway. It will be the currency that appreciates in 2017, it’s just a question of how much,” said Andrew Milligan, head of global strategy at Standard Life Investments Ltd. in Edinburgh.
The MSCI Asia Index excluding Japan slid 0.3 per cent as of 9:56am in Singapore, with Australia’s S&P/ASX 200 Index down 0.3 per cent, the Hang Seng down 0.4 per cent and Korea’s Kospi little changed.
New Zealand’s benchmark was up 0.4 per cent. China’s CSI 300 Index fell 0.3 per cent.
The S&P 500 Index declined for a second day yesterday, losing 0.2 per cent. The Dow fell 0.1 per cent as its push to 20,000 has stalled.
The blue-chip index yesterday came within 14 points of the round-number milestone before pulling back.
Billionaire investor Carl Icahn said he was concerned about the US stock market “in the short term” given its run-up following Trump’s win, adding that he increased his hedging in recent weeks.
Many investors are likely waiting until January to sell stocks in anticipation of lower taxes on those gains in 2017, Icahn said on CNBC.
Orders for US business equipment advanced more than forecast last month, while the final reading of third-quarter gross domestic product topped estimates.
Treasury futures were weaker after US bonds fell yesterday, taking 10-year yields up by two basis points to 2.55 per cent.
Australian bonds fell, pushing the 10-year yield four basis points higher to 2.87 per cent, while the rate on similar-dated kiwi notes climbed three basis points to 3.47 per cent. German bunds also declined yesterday, with the benchmark yield two basis points higher at 0.27 per cent.
US mortgage rates rose, with the 30-year reaching the highest level since April 2014, after the Federal Reserve increased its benchmark lending rate.
West Texas Intermediate crude oil declined 0.7 per cent to US$52.59 (RM235.58) a barrel.
Gold traded near the lowest level in 10 months as exchange-traded funds holding the metal saw a 29th day of contraction, advanced 0.2 per cent to US$1,130.26 an ounce after sliding 0.3 per cent the previous session.
Tin and nickel each rose 0.2 per cent, while copper retreated on the London Metal Exchange. — Bloomberg