Asian stocks slide, dollar soars to safety By Reuters

Asian stocks slide, dollar soars to safety By Reuters

© Reuters. FILE PHOTO: Man walks past a stock listing board at a brokerage house in Tokyo, Japan

Par swati pandey

SYDNEY (Reuters) – Asian stocks hit a two-week low on Wednesday, oil weakened further and the dollar moved closer to its four-month highs as coronavirus lockdowns in Europe and Potential US tax hikes have hit risk appetite, leading to a flight to safety.

The largest MSCI index of Asia-Pacific stocks outside of Japan fell 1% after falling 0.9% on Tuesday. It went as low as 676.46 points, a level last seen on March 9.

The index had a disappointing move in March after five straight months of gains, as risk assets had previously been scared of fears that inflation could pick up at a faster pace than expected, thanks to the successful rollout of the vaccine against coronaviruses and a massive fiscal stimulus in the United States.

stumbled 1.8% while South Korea slipped 0.5%. Chinese stocks were in the red for a second day with the blue chip CSI300 index down 1.2%. Hong Kong slipped 1.7%.

On Wall Street overnight, the decline of 0.94%, the loss of 0.76% and the decline of 1.12%.

“The combination of increasing lockdowns across much of Europe and some risk reduction in the EM space, led to a risk-free day where Treasuries rallied through a flight offer to quality, ”John Briggs, Global Strategy Manager for NatWest wrote in a note to clients.

Germany has extended its lockdown until April 18. A U.S. health agency said the AstraZeneca vaccine (NASDAQ 🙂 Plc developed with the University of Oxford may have included outdated information in its data, further fueling investor concerns over the recovery.

“So unlike the day before, reduced risk appetite was the driving force today, which also led to the USD rising sharply in a flight to quality, not just against the ME but also against most of the majors, ”added Briggs.

Adding to the woes of investors, Treasury Secretary Janet Yellen told Congress on Tuesday that the US economy remains under threat.

In currencies, the approached a four-month high of 92.506 against a basket of most major currencies. [FRX/]

The euro hit a four-month low below $ 1.18355 – trading as low as $ 1.18360 – after Germany extended its lockdown. The safe haven yen was stronger overall and the Australian dollar – seen as a liquid indicator of risk – weakened further on Wednesday.

The price of the benchmark 10-year notes rose 19/32 to 1.6153% after Federal Reserve Chairman Jerome Powell downplayed inflation risk.

US manufacturing data was due later Wednesday and Powell was due to give the same prepared testimony to a Senate banking panel.

The flight to safety has hit commodity prices, although oil prices edged up on Wednesday as investors scoured bargains. Gains were capped, however, as lockdowns in Europe and the rise in equities dampened risk appetite and raised fears of overproduction. [O/R]

Futures fell 16 cents to $ 60.62 a barrel, after falling 5.9% to a low of $ 60.50 on Tuesday. West Texas Intermediate (WTI) crude futures slipped 21 cents to $ 57.55, after losing 6.2% the day before.

Safe haven gold was higher at $ 1,731.2 an ounce.

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