Asian stocks fall as China’s property pains weigh on sentiment. Thursday saw a halt to the sharp gains gained this week in Asian equities as new data from China revealed persistent weakness in the real estate market and undermined some of the recent hope for a rebound in the second-largest economy in the world.
Although this week’s statistics indicated that China’s retail and industrial sectors were rebounding, a steep decline in real estate investment and poor house prices point to ongoing issues that may impede the nation’s overall recovery.
October saw growth in Japanese exports for the second consecutive month, but at a noticeably slower rate because of a decline in steel and semiconductor shipments to China.
According to Tina Teng, a market analyst at CMC Markets, “the weak economic data from both countries indicate the fact that the global economy is slowing down, highlighting ongoing macro headwinds that businesses face.”
“China’s housing crisis remained a major issue for the economy, and weakened global consumer demands will likely continue to press on sentiment.”
European markets were expected to begin lower, with German DAX futures down 0.11%, FTSE futures down 0.11%, and pan-region Euro Stoxx 50 futures down 0.21%.
Although the index has increased by 7.1% this month, MSCI’s broadest index of Asia-Pacific equities outside of Japan (.MIAPJ0000PUS) fell 0.4% in afternoon trade.
Despite solid pay statistics suggesting that inflationary pressures remained high, Australian equities (AXJO) fell 0.67%. As investors sold equities to lock in profits from the previous session’s high gains, Japan’s Nikkei stock index (.N225) fell 0.18%.
On Wednesday, the MSCI Asia ex-Japan index, the Nikkei, and the MSCI Emerging Market index (.MSCIEF) all reported their highest gains in a year, rising by at least 2.5%.
A high-level Sino-US summit left investors unsatisfied, contributing to Thursday’s stock market decline in China. Shanghai’s blue-chip CSI300 index (.CSI300) declined 0.72%, while the Hang Seng index (.HSI) in Hong Kong sank 1%.
Some investors were unhappy that there were no significant advances in the negotiations, even though U.S. President Biden and Chinese leader Xi Jinping had agreed to agree on military-to-military communications and collaborate on anti-drug programs, indicating that ties were strengthening.
U.S. equities U.S.d. the day on Wednesday marginally higher as retail sectors gained from Target’s optimistic prediction, and inflation data confirmed market views that the Fed is done hiking interest rates.
The Nasdaq Composite (.IXIC) trimmed previous gains to close flat, the S&P 500 (.SPX) gained 0.16%, and the Dow Jones Industrial Average (.DJI) increased by 0.47%.
According to CME Group’s Fedwatch tool, money market traders have wholly priced in the likelihood that the US Federal Reserve would maintain unchanged interest rates in December. They also anticipate that in May 2024, the cycle’s first-rate decrease will begin.
Given the decline in bond rates and the currency’s strength, investors are increasingly factoring in more rate cuts for 2019. Some of that was undone on Wednesday as the dollar and Treasury rates marginally recovered from their declines the day before.
Benchmark 10-year Treasury note yields were 4.5039% as of Wednesday’s U.S. closing of 537%. In contrast to the U.S. approaching S.916%, the two-year yield, which rises in tandem with traders’ forecasts of increasing Fed fund rates, hit 4.8989%.
The euro, which follows the value of the US dollar against a basket of key trade partners, was up at 104.48. The European single currency was up 0.1% on the day at $1.0837, gaining 2.47% monthly.
The price of US oil fell 0.25 U.S. to $75.97 per barrel. A barrel of Brent oil dropped to $80.44. Gold had increased somewhat. The spot price of gold was $1963.29 an ounce.