By Paulina Duran and Matt Scuffham
SYDNEY / NEW YORK (Reuters) – Asian stocks started Tuesday on a weak base after a largely weak performance on Wall Street and as lingering concerns over the spread of the Delta variant of the coronavirus hit sentiment and triggered declines in the prices of metals and oil. .
MSCI’s broader index of Asia-Pacific stocks outside of Japan fell 0.4% in early trading, with Korea’s index falling 0.56% while China’s CSI300 first-class index lost 0 , 33%.
“With the expansion of the Delta variant, money managers who overinvested in the reopening trade continue to undo that trade because it is not working at this time,” said Dennis Dick, operator of Bright Trading LLC.
rose 0.9%, while Australia’s benchmark S & P / ASX200 index rose 0.2% on strong earnings results.
Oil prices were recovering on Tuesday after falling as much as 4% in the previous session, which extended last week’s heavy losses amid a rising US dollar and concerns that new coronavirus-related restrictions in China they could slow the global reactivation of fuel demand. ()
Oil futures were trading at $ 66.82 a barrel, up $ 0.35 or 0.53%. it was $ 69.29, $ 0.25 or 0.36% higher.
Gold stabilized after falling to a more than four-month low on Monday, as strong US employment data bolstered expectations for an anticipated reduction in economic support measures from the Federal Reserve.
XAU = it was getting $ 1,732.13 an ounce, up 0.16%.
Strong employment data boosted US Treasury yields, with benchmark 10-year notes last yielding 1.3237%, down from 1.3170% on Monday.
“Having gone from a very inflation-friendly view this year to a very deflated view for a week or so, what we’re getting now is another rotation in some of the reflation operations,” said Sean Darby of Jefferies. (NYSE 🙂 strategist in Hong Kong.
“The only thing different between now and the last 12 to 19 months is that it is likely to be accompanied by a stronger dollar.”
The US stock indices were mostly soft, falling 0.3%, falling 0.09% and adding 0.16%. MSCI’s global stock indicator was 0.03% lower.
In the United States, the Senate came closest to passing a $ 1 trillion infrastructure package, though it has yet to go through the House.
Investors were still evaluating whether Friday’s strong US payroll report would bring the Fed one step closer to reversing its stimulus.
“What we are seeing is a small anticipated profit taking due to the fear that the drawdown will occur in early September,” said Sebastien Galy, senior macroeconomic strategist at Nordea Asset Management. “But as you can see, it has little impact because the effect of a better economy far outweighs the substitution effect of higher interest rates.”
However, the pace of reduction was still up in the air and would decide when a real rate increase would occur, he said. Currently, the Fed is buying assets worth $ 120 billion a month.
The spread of the Delta variant could argue for a longer reduction.
On the upside, stocks have been supported primarily by a strong earnings season in the US BofA analysts noted that S&P 500 companies were following a 15% pace in second-quarter earnings, having reported 90%.
In currency markets, it was up 0.02%, and the euro fell 0.03% to $ 1.1732, its lowest level since early April.
The dollar held firm against the yen at 110.38 yen, close to its highest level in about two weeks.
The widespread rally in the US currency came as US Treasury yields spiked to three-week highs on strong employment data and early speculation about the Fed’s phasing out.