Global Markets Follow U.S. Stocks Lower
January 28 2021 - 3:05AM
Dow Jones News
By Chong Koh Ping
International stocks retreated Thursday, after concerns about
Covid-19 vaccine distribution helped push major U.S. indexes to
their steepest one-day falls since October, and sent a measure of
expect volatility soaring.
By early afternoon in Hong Kong, the city's Hang Seng Index was
2.3% lower. South Korea's Kospi Composite, Australia's S&P/ASX
200 and Japan's Nikkei 225 fell between 1.5 and 1.9%.
S&P 500 and Nasdaq-100 futures shed 0.4% and 0.6%
respectively. In another sign of rising risk aversion, the yield on
the 10-year U.S. Treasury note dropped below 1% for the first time
since Jan. 6, falling to as low as 0.998%, according to Tradeweb.
Bond yields fall as prices rise.
Tai Hui, chief Asia market strategist at J.P. Morgan Asset
Management, said that until Thursday, Asia Pacific markets had
risen steadily so far this year. "Investors are asking if this
rally has run a little too far, " he said.
Mr. Hui said he expects the run-up to Lunar New Year holidays,
which start on Feb. 12, to be a period of consolidation for
regional markets, rather than bring further large moves.
In mainland China, the CSI 300, a gauge of the biggest stocks
trading in either Shanghai or Shenzhen, declined 2.9%.
Container-shipping giant Cosco Shipping Holdings Co. led losses,
declining 9.9%.
In another sign of jitters in Chinese markets, money-market
rates continued to rise. The one-week Shanghai interbank offered
rate rose 0.012 percentage point to 2.981%, its highest since 2015,
according to FactSet.
Short-term borrowing costs have risen in recent days as the
People's Bank of China unexpectedly drained funds from the
financial system. Earlier this week a major business newspaper also
published remarks by Ma Jun, an adviser to the central bank, who
warned of asset bubbles emerging due to loose monetary policy.
Xing Zhaopeng, a China markets economist at ANZ in Shanghai,
said outflows from Chinese markets and the central bank's stance
had both contributed to the selloffs in Shanghai and Shenzhen.
"International investors are cutting their risky positions due to
the worry of bubbles, including onshore equities and bonds," Mr.
Xing said.
Mr. Hui at J.P. Morgan Asset Management said new pockets of
coronavirus outbreaks in China had also dented investor
sentiment.
The yield on the 10-year U.S. Treasury note dropped slightly, to
1.003%, according to Tradeweb. Bond yields fall as prices rise.
The dollar strengthened against various currencies including the
Australian dollar and the Korean won. The WSJ Dollar Index rose
0.18% to 85.68, its highest in more than a month.
Write to Chong Koh Ping at chong.kohping@wsj.com
(END) Dow Jones Newswires
January 28, 2021 02:50 ET (07:50 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.