Asian stocks dip, dollar up as China tech retreats: markets wrap

Asian stocks fell Thursday on caution about the regulatory outlook in China and a looming Federal Reserve gathering that may provide more clues about its approach to paring stimulus. The dollar rose.

MSCI Inc.’s Asia-Pacific gauge snapped a three-day rally, with Chinese stocks resuming a retreat amid Beijing’s crackdown on private industries. South Korean shares dipped after a central bank rate hike that makes the nation the first major Asian economy to start exiting record-low borrowing costs.

US equity futures declined after the S&P 500 and Nasdaq 100 edged up to records overnight. The 10-year US Treasury yield held an advance. Traders are looking ahead to the Jackson Hole symposium, which may offer fresh insight on how the Fed intends to scale back bond purchases.

Views are split on whether Chairman Jerome Powell’s speech to the symposium Friday will provide a clearer guide on tapering emergency Fed support. While the ongoing economic rebound and elevated inflation add to the case for starting policy normalisation, the fast-spreading delta virus strain threatens a slower pace of recovery than some had expected.

Powell’s “speech will likely emphasize the economic recovery is well past the crisis and that they will shortly announce they are ready to taper asset purchases,” Edward Moya, senior market analyst at Oanda, wrote in a note.

The latest US data showed orders placed with factories for business equipment unexpectedly stalled in July, marking a pause in a months-long buildup in capital investment.

Elsewhere, crude oil dipped below $68 a barrel, paring a rally this week driven by bets that demand will weather the delta virus strain’s impact on the economic recovery. Gold fell below $1 800 and Bitcoin traded around $48 000.

Here are some events to watch this week:

• Fed officials attend the Jackson Hole Economic Policy Symposium from Thursday through Saturday
• US GDP, initial jobless claims Thursday
• July US personal income and spending data Friday. Investors will scrutinize the personal consumption expenditures price index, an inflation measure closely watched by the Fed.

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.2% as of 12:30 p.m. in Tokyo. The S&P 500 rose 0.2%
• Nasdaq 100 futures lost 0.2%. The Nasdaq 100 was little changed
• Japan’s Topix index fell 0.2%
• Australia’s S&P/ASX 200 Index fell 0.4%
• South Korea’s Kospi index slid 0.7%
• Hong Kong’s Hang Seng Index fell 1.1%
• China’s Shanghai Composite Index dropped 0.5%

Currencies

• The Japanese yen was at 109.94 per dollar, up 0.1%
• The offshore yuan traded at 6.4810 per dollar
• The Bloomberg Dollar Spot Index added 0.1%
• The euro was at $1.1763

Bonds

• The yield on 10-year U.S. Treasuries was at 1.33%
• Australia’s 10-year bond yield rose two basis points to 1.18%

Commodities

• West Texas Intermediate crude fell 0.7% to $67.87 a barrel
• Gold was at $1 788.17 an ounce