Furious US rebound fails to stoke Asia's stocks

  • Markets
  • Friday, 28 Dec 2018

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 percent in early Asian trade after U.S. stocks finished the previous session higher, amid cautious optimism for progress in Chinese-U.S. trade talks. Japan's Nikkei stock index gained 0.8 percent, while Australian shares were up 0.2 percent. (A man walks past an electronic stock board showing Japan's Nikkei 225 and other country's index at a securities firm in Tokyo Tuesday, Dec. 11, 2018. - AP

TOKYO: Wall Street’s wild afternoon rebound failed to carry through to Asia on Friday, with Japanese shares dropping at the open and U.S. futures sliding. The yen edged up, heading for its best two-week advance since February. 

Equity benchmarks fell in Tokyo, and saw modest gains in Sydney and Seoul after the S&P 500 Index erased a drop of almost 3 percent in its afternoon rebound -- the biggest upward reversal since 2010. It’s been a week of superlatives for stock traders, after American shares climbed the most in more than nine years on Wednesday. In other markets, 10-year Treasury yields held below 2.80 percent, and oil traded around $45 in New York.

“From a time perspective, it’s a historic bull market and when you get that far into the cycle, people get more jittery,” said Sean O’Hara, president at Pacer ETFs. “It’s hard to explain moves” like the ones recently seen, he said.

The S&P 500 has been careening toward its worst month of the record bull run and is down about 15 percent in the quarter as everything from higher interest rates to political turmoil in Washington to concern about global growth hammer at investor sentiment. Havens came back in vogue, with Treasuries rallying this month, and gold climbing with the yen.

The euphoria of equity investors evaporated earlier from Wednesday, when investors cheered a reminder of the American consumer’s strength and got reassurance on the tenure of the Federal Reserve chief and progress on U.S.-China trade talks. While there was no obvious catalyst for the return to selling that took stocks within a whisker of a bear market, the moves of the past few days sent volatility soaring.- Bloomberg
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