Asian stocks on the verge of rocking as US economic news pushes indices down

WASHINGTON, March 24 (Reuters) – Asian markets are likely to open mixed on Thursday after global equities fell, and U.S. investors have questioned which equity sectors would benefit most from stronger growth.

Concerns about the prolongation of economic lockdowns in Europe and possible tax hikes in the United States have also weighed on investor morale.

“Rising interest rates, uncertainty in fiscal policy, concerns about inflation remain a priority for investors. However, none of these themes point to a growing appetite for risk,” said Peter Kenny of Kenny’s Commentary LLC and Strategic Board Solutions LLC in Denver.

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“We find that the big gains from last year are underperforming the overall market.”

European stocks closed near their two-week lows, while oil prices regained steep losses earlier in the week after one of the world’s largest container ships ran aground in the canal from Suez. Authorities were still trying to clear the ship from the vital seaway on Wednesday afternoon. Read more

“While the cruise industry is only a tiny fraction of the stock market… it’s possible the news has served as a reminder of the larger threat COVID-19 still poses to the whole reopening narrative,” said Chris Zaccarelli, Director of Investments. at Independent Advisor Alliance in Charlotte, North Carolina.

“We have no doubts that the economy will reopen significantly year on year and that GDP growth will be impressive, but it is worth remembering that we must be wary of the market becoming too far ahead of the facts. in the field. “

Australian S & P / ASX 200 futures fell 0.18% early in trading.

Hong Kong Hang Seng Index futures (.HSI) fell 0.42%.

Japanese Nikkei 225 futures rose 0.39%.

Emerging markets equities (.MSCIEF) lost 1.91%. The largest MSCI index for Asia-Pacific stocks outside of Japan (.MIAPJ0000PUS) closed down 1.86%.

On Wall Street, the Dow Jones Industrial Average (.DJI) lost 3.09 points, or 0.01%, to 32,420.06, abandoning early gains even as investors crammed into economically sensitive sectors on bets for continued economic recovery in the United States, analysts say.

The Nasdaq Composite (.IXIC) lost 265.81 points, or 2.01%, to 12,961.89, while the S&P 500 (.SPX) lost 21.38 points, or 0.55%, to 3 889.14, unable to halt the previous day’s sale, as investors stared aside for the economic optimism of Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen.

The remarks of the two top US economic officials mirror what they told Congress the day before, with Powell saying on Wednesday that the most likely case is that 2021 will be “a very, very strong year.” Read more

Powell said a series of post-pandemic price hikes would not fuel a destructive surge in inflation. Read more

“For the first time in probably six months, real questions have been raised about the pace and trajectory of the economic recovery,” said Kyle Rodda, analyst at IG Markets.

“What had perhaps been complacency towards the virus and the prospect of lockdowns forced markets to fundamentally reassess the conversation about the risks of too hot economies, inflationary pressures and higher yields.”

The pan-European STOXX 600 index (.STOXX) rose 0.02% and the MSCI gauge of equities around the world (.MIWD00000PUS) lost 0.90%.

Investors focused on the benchmark 10-year T-bill yield, wondering if there was room for long-term interest rates, said David Kelly, chief global strategist at JPMorgan Asset Management. Read more

“We know the economy is set to start really picking up in the second quarter,” Kelly said. “But we haven’t seen that acceleration yet, so that’s what we’re expecting.”

Support for most of the session came from data showing US factory activity rebounded in early March on strong growth in new orders. But supply chain disruptions put cost pressures on manufacturers, keeping inflation fears in the spotlight. Read more

US crude recently fell 0.72% to $ 60.74 a barrel and Brent was at $ 64.22, up 5.64% on the day.

The dollar index rose 0.196%, with the euro unchanged at $ 1.1812. The benchmark 10-year notes were last up 1/32 the price for a yield of 1.6102%, down from 1.614% on Wednesday night.

“We’ll have to watch and wait naturally to see how this plays out,” IG’s Rodda added.

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Reporting by Katanga Johnson; Editing by Richard Chang

Our Standards: Thomson Reuters Trust Principles.

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