Asian stocks steady as calm returns but jitters keep dollar firm

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HONG KONG (Businesshala) – Asian stocks found some calm on Thursday after this week’s heavy China-driven losses, though the dollar sat at a more than a year high against key peers, fueled by safe-haven demand and tighter US gains. Monetary expectations remained intact. Policy.

Passers-by wearing protective masks are seen on an electronic board displaying stock prices outside a brokerage amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan September 29, 2021. REUTERS/Issei Kato

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.06%, a day after Japan’s ruling party elected soft-spoken consensus-maker Fumio Kishida as its new leader and the country’s new prime minister. The Nikkei subsequently declined 0.36%.

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Concerns about economic growth in China due to a worsening power crisis coupled with fears of a global recession, weighed on Asian stocks on Wednesday.

However, the dollar index – which measures the US currency against six major currencies – rose against the yen to its strongest level in nearly 18 months and against the euro in 14 months. It held these gains in Asian hours, and was last at 94.314.

“The (dollar) is breaking out of key levels and there was no real resistance to the break, which lets you know there was real underlying strength,” said Chris Weston, head of research at Melbourne brokerage Pepperstone.

“Sometimes, it can turn out to be somewhat of a magic currency,” he said, pointing to the fact that it was backed by security-seeking global investors and that the Fed was trying to reduce its heavy asset purchases. was approaching.

“Furthermore, “the current US debt limit deadlock could increase financial market panic and support the USD in the near term,” CBA analysts said in a note.

US lawmakers continue to struggle to fund the government but face a Friday deadline to prevent a shutdown, something that also limited overnight gains in US equities.

In Asian equity markets, Hong Kong shares fell 1%, but were largely balanced by a 1.1% gain in Australia.

Chinese blue chips rose 0.5% after data published early Thursday showed China’s services sector returned to expansion following the COVID-19 outbreak in September. However, factory activity fell unexpectedly as high raw material prices and power cuts continued to put pressure on manufacturers.

“It is likely that China’s electricity shortage will persist through the end of 2021, as local governments pressure to meet emissions reduction targets this year,” said Chaoping Zhu, global market strategist at JP Morgan Asset Management, in emailed comments. are in.”

“Investors can be cautious about China’s corporate earnings (in Q4). Meanwhile, volatile global market is expected to further impact investor sentiment in the near future.

The other main pressure on investor sentiment in Greater China was developer China Evergrande, whose shares swing back and forth, and were down 2.2% in the past.

The company was due to pay interest on the one-dollar bond on Wednesday, but Businesshala reported that interest had not been paid to some offshore bondholders by the end of the Asian day.

Overnight, the Dow Jones Industrial Average and the S&P 500 both posted small gains but the Nasdaq Composite dropped 0.24%.

Oil prices fell after official data showed an unexpected rise in US inventories, widening losses.

Brent crude was down 0.14% at 78.53 per barrel, US crude was down 0.03% at $74.81.

Spot gold was trading at a near seven-week low of $1,731.99 an ounce due to the strengthening of the dollar.

Editing by Sam Holmes

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