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Asian stocks may slip for a 2nd consecutive day

Thursday, 20 April 2017

HONG KONG: Asian stocks may slip for a second consecutive day on Thursday as a weak Wall Street and declining commodity prices, especially for oil, prompted investors to trim their exposure to risky assets.

With the outcome of the French presidential elections due at the weekend, markets are set to trade in well worn trading ranges, barring any major data surprises in Asia. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.5% in early trades after declining nearly 1% on Wednesday.

Centrist Emmanuel Macron clung on to his status as favourite to win France’s presidential election in a four-way race that is too close to call, as the camp of far-right challenger Marine Le Pen ramped up its eurosceptic rhetoric in a row with Brussels.

Weak results from index heavyweight IBM pulled the S&P 500 and Dow lower with falls in energy sector stocks also weighing on the broader market. Bonds also came in for some profit taking after a recent rally, with yields on benchmark 10-year U.S. Treasury notes firming to 2.21% from a 5-month low of 2.165% hit on Tuesday.

A run of disappointing U.S. economic data and doubts how far the Trump administration will progress with tax cuts have quelled expectations of faster inflation and boosted fixed-income debt. The dollar failed to capitalize on higher U.S. yields with the greenback hugging the 200-day moving average of around 108.85 against the Japanese yen as traders preferred to trade on market technicals rather than take fresh bets.

Oil languished near a two-week low after a surprising build in U.S. gasoline inventories and a rise in domestic crude output that is partially offsetting cutbacks by other countries trying to reduce a global glut. U.S. crude futures edged 0.42% higher to $50.65 a barrel, after posting a near 4% drop overnight, the biggest one-day decline since 8 March.

Elsewhere, gold was trading at $1279.48 per ounce, below Monday’s peak of $1,295.42.

Source by: Internet

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