Hong Kong shares lead broad retreat in Asia as month winds up
- Treasuries nudge higher as trading resumes after holiday
Stocks in Europe edged lower with U.S. equity futures while Asian shares fell, setting up a lackluster end to a third straight month of increases for major global benchmarks. The dollar was steady.
The Stoxx Europe 600 Index pared a decline to trade modestly lower, with gains in media shares partially offsetting losses in miners. Contracts on the S&P 500, Nasdaq 100 and Dow Jones Industrial Average also clipped an earlier drop but still signaled a weak start on Wall Street, where markets will reopen after the Thanksgiving break. All major Asia benchmarks fell, led by a 2% decline in Hong Kong’s HSI Index. U.S. Treasuries edged up as they returned to trading in Asia and Europe.
Investors are hungry for evidence of progress on a Sino-U.S. trade deal, with the next batch of American tariffs on Chinese goods due to begin Dec. 15 and additional tension building over Hong Kong. China’s foreign ministry warned again of unspecified retaliation for U.S. President Donald Trump’s signing of legislation that expresses support for protesters in Hong Kong.
“Markets are on a sort of ‘wait and hold’ in terms of that phase-one trade deal,” David Riley, chief investment strategist at BlueBay Asset Management, told Bloomberg TV. “If there is a skinny deal, that will allow markets and risk assets to grind higher even if there is no real prospect of a phase two or subsequent detailed negotiation occurring this side of U.S. presidential elections.”
Elsewhere, West Texas-grade oil traded around $58 a barrel. The won weakened after the Bank of Korea kept its policy rate unchanged, as expected. The Chilean peso set a record low for a second day and the central bank said it will directly intervene.
These are the main moves in markets:
- Futures on the S&P 500 Index dipped 0.2% as of 10:23 a.m. London time.
- The Stoxx Europe 600 Index decreased 0.1%.
- The MSCI Asia Pacific Index sank 0.9%.
- The MSCI Emerging Market Index dipped 0.9%.
- The Bloomberg Dollar Spot Index was little changed.
- The euro was little changed at $1.1006.
- The British pound fell 0.1% to $1.2896.
- The onshore yuan increased 0.2% to 7.021 per dollar.
- The Japanese yen was little changed at 109.55 per dollar.
- The yield on 10-year Treasuries decreased one basis point to 1.76%.
- The yield on two-year Treasuries sank one basis point to 1.62%.
- Germany’s 10-year yield dipped one basis point to -0.37%.
- Britain’s 10-year yield declined one basis point to 0.667%.
- Japan’s 10-year yield advanced one basis point to -0.073%.
- West Texas Intermediate crude dipped 0.1% to $58.05 a barrel.
- Iron ore declined 0.6% to $84.54 per metric ton.
- Gold was little changed at $1,456.63 an ounce.
Frontpage December 19, 2018