8 Sept 2021
Asian Shares Hovered as Dollar Gains Overnight
The Index Today
Wednesday, it was reported that Asian shares hovered just off six-week highs, as investors prefer to preserve of capital over the potential for a higher-than-average return into the market from the United States; due to worries about the slow growth that will affect the stocks while supporting the dollar firm.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.13% having posted gains, if sometimes small, for 11 of the last 12 sessions.
Japan's Nikkei reversed early losses and was last 0.42% higher after revised gross domestic product growth figures beat expectations for the world's third-biggest economy.
Most other moves were muted in early trading. Australia slipped 0.32%, Chinese blue chips fell 0.04%, and the Hong Kong benchmark gained 0.12%.
Medium-term prospects for the region also continue to weigh on shares in Asia. The MSCI regional benchmark is still well off all-time highs, unlike equity markets in the U.S. and Europe.
David Chao, Global Market Strategist, Asia Pacific (ex-Japan) at Invesco says that "The Asia Pacific region – following a zero-tolerance (coronavirus) pandemic policy and reliant on exports for growth - could underperform as global demand for goods softens and social distancing restrictions in many APAC cities are reimposed," said "This, coupled with the region's much lower vaccination rate, could lead to a continued cycle of lockdown and releases."
U.S. stock futures, the S&P 500 e-minis, gained 0.10%.
Overnight the MSCI world equity index retreated from a record high after seven consecutive days of gains.
U.S. shares had slipped, said analysts at ANZ in a note, on concerns that the U.S. economy may be starting to slow following "the weaker-than-expected jobs data on Friday evening after which markets were closed for a long weekend."
The dollar held onto its overnight gains against a basket of its peers having risen from near a four week-low overnight alongside benchmark U.S. treasury yields.
Yields on 10-year Treasury notes dropped back in Asian hours and were last at 1.3570% compared to a U.S. close of 1.371% on Tuesday, after touching an eight-week high of 1.385% earlier in the day.