Asian stocks hold onto gains, dollar strong on Fed official comments

HONG KONG, Aug.5 (Reuters) – Asian stocks held onto their recent gains in morning trading on Thursday, despite hawkish remarks from a senior US Federal Reserve official, which boosted the dollar while weighing on appetite for the risk and uncertainty on Chinese policy.

The largest MSCI Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) rose 0.22%, and Japan’s Nikkei (.N225) climbed 0.32%.

Australia (.AXJO) gained 0.18%, Chinese blue chips (.CSI300) were down 0.28% and Hong Kong (.HSI) was up 0.45%.

This week, the Asian regional benchmark MSCI regained much of the ground lost a week earlier, when a series of Chinese regulatory crackdowns in sectors ranging from real estate to education squeezed stocks. Chinese and eclipsed the region as a whole. Read more

Chinese stocks have been calmer this week, barring sharp swings by tech giant Tencent (0700.HK) after state media criticized the gaming industry. Read More

“In the near term, the new rebound could continue, but uncertainties over policy control will push long-term investors away from Chinese tech names,” said Edison Pun, senior market analyst at Saxo Markets.

Pun also highlighted remarks about the e-cigarette trade in state media on Wednesday, which he said could also put pressure on related actions. Read more

US stocks closed largely lower on Wednesday, with the S&P 500 (.SPX) falling 0.46% from a record high. The Dow blue chip (.DJI) slipped 0.92%, although the Nasdaq (.IXIC) made small gains as investors valued positive service sector data over negative numbers employment.

US equity futures – the S&P 500 e-minis – edged up 0.2% in Asian trading.

Markets are looking at “mixed data signals and trying to gauge what the Fed is going to do,” said Kyle Rodda, analyst at IG Markets. Rodda said the latest moves were prompted by an overnight speech by Fed Vice Chairman Richard Clarida that took on a more hawkish tone.

Clarida, one of the main architects of the Fed’s new policy strategy, said he believed the conditions to raise interest rates could be in place by the end of 2022. read more

These remarks helped US yields and the dollar.

The benchmark 10-year yield was 1.199% higher from a US close of 1.184%, after touching 1.127% – its lowest level since February – earlier today.

This helped the dollar, which bought 109.63 yen, against a low of 108.71 on Wednesday.

The stronger dollar in turn weighed on gold a bit, with the spot price falling 0.1%.

US crude rose 0.37% to $ 68.4 per barrel while Brent crude climbed to $ 70.61 per barrel, regaining some ground after three straight days of decline.

CBA analysts said Wednesday’s drop was the result of “a sharp increase in crude oil inventories in the United States (which) crystallized conceptual market angst over the dragging Delta COVID variant. fuel demand “.

Ether, the world’s second largest cryptocurrency, fell 1.75% after gaining 8.7% a day earlier before a technical adjustment to its underlying ethereum blockchain, which is expected to occur later in the year. daytime.

Bitcoin fell 1.3%, resting around $ 40,000 where it was last week.

Editing by Kenneth Maxwell

Our Standards: Thomson Reuters Trust Principles.