Asian equities eased from record highs on Thursday as stalled U.S. stimulus talks and a sell-off in tech stocks weighed, while sterling traders sat on a knife’s edge as last-ditch Brexit negotiations yielded only an agreement to keep talking.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.34%. Japan’s Nikkei erased early losses to trade 0.1% lower. Both are up more than 60% from March lows. S&P 500 futures meanwhile pared early gains and steadied in Asian afternoon trade.
U.S. Treasuries rose while the dollar slightly eased after a volatile overnight session in currency markets, with traders now looking ahead to a European Central Bank monetary policy meeting. Sterling teetered at $1.3366 as it awaits a Brexit resolution.
“We’ve risen so far so fast that it’s making investors cautious,” said Michael McCarthy, chief strategist at stockbroker CMC Markets in Sydney.
“The fall in tech stocks was a bit of a concern, given that they’ve risen in all market weather over the last six weeks, so to see them come off might signal that we’re looking at a short term corrective move.”
A near 2% drop in the Nasdaq on Wednesday was driven by a 1.9% fall in Facebook (NASDAQ:FB) shares after U.S. regulators filed lawsuits alleging the company used its dominance to buy or crush rivals, harming competition.
Meanwhile, S&P Dow Jones Indices said on Thursday it would remove ten Chinese companies from its equities indices and several others from its bond indices.
This move comes after a Trump administration order to prohibit purchases by U.S. investors of certain Chinese securities. Index provider FTSE Russell did the same last week.
Cautious trading in Asia came amid widespread uncertainty surrounding long-running U.S. pandemic relief negotiations and talks between Britain and the European Union over trade arrangements post Brexit.
U.S. lawmakers approved a stopgap government funding bill on Wednesday, but were unable to sort out disagreements over aid to state and local governments that are holding up a broader spending package.