Asian stocks fell for a fifth day, with the regional benchmark index heading for its second week of losses, following a decline in U.S. equities as Greece asked for a deferral on its debt payments.
The MSCI Asia Pacific Index dropped 0.3 percent to 148.85 as of 9:01 a.m. in Tokyo, heading for a 1.7 percent decline this week amid a selloff in bonds and commodities. The Standard & Poor’s 500 Index dropped on Thursday as raw-material producers slid and Greece became the first country since the 1980s to defer a payment to the International Monetary Fund. While international officials have reported some progress in the talks in recent days, German Chancellor Angela Merkel said they were far from reaching a conclusion.
“The market selloff isn’t over given the huge moves we’ve seen this week in the bond markets,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said by phone. “Greece delaying debt payments is definitely not positive. There’s a lot of pressure on asset prices that’s really related to the bond market moves.”
The global bond rout, reignited this week by signs of inflation in the euro area, took a breather on Thursday, with 10-year U.S. Treasuries rising for the first time this week. Germany’s 10-year bund yields reached almost 1 percent before pulling back to 0.84 percent, while rates from Spain to Italy retreated.
Japan’s Topix index slipped 0.7 percent. Australia’s S&P/ASX 200 Index lost 0.1 percent. New Zealand’s NZX 50 Index sank 0.4 percent, as did South Korea’s Kospi index. Markets in China and Hong Kong have yet to open.
The Shanghai Composite Index rose 0.8 percent on Thursday after changing direction at least 10 times. The ChiNext index fell from a record after Golden Sun Securities Co. suspended margin loans for the stocks amid concern that gains have gone too far, too fast.
Record growth in margin debt helped add more than $4 trillion to the value of Chinese shares this year, raising concern among some investors that valuations are reaching excessive levels. Bill Gross took to Twitter on Wednesday to say shares on the technology-heavy Shenzhen bourse are the next big trade for short sellers. The gauge fell 0.6 percent Thursday from an all-time high.
E-mini futures on the Standard & Poor’s 500 Index slipped 0.1 percent today. The underlying equity measure dropped 0.9 percent to a four-week low on Thursday. The IMF cut its U.S. growth forecast and said the Fed should hold off from raising interest rates until the first half of 2016. The government’s monthly employment data are due today, and economists predict the economy added 225,000 jobs in May, compared with April’s 223,000.
Crude was poised to snap its 11-week surge amid speculation OPEC will refrain from cutting output at its meeting in Vienna on Friday.
Courtesy: Bloomberg 05 June 2015