HONG KONG, July 28 (Reuters) – Asian stocks were stuck at their seven-month lows on Wednesday as markets continued to digest a storm in Chinese stock markets as the dollar remained with traders reluctant to place big bets before the result of the Federal Reserve meeting.
The largest MSCI Asia-Pacific equity index outside of Japan (.MIAPJ0000PUS) fell 0.35% early in the session, after falling in each of the previous three sessions as regulatory crackdown in China rocked stocks in tech, real estate and education sectors, leaving international investors bruised. Read more
The Japanese Nikkei (.N225) slipped 1.01%, Chinese bluechips (.CSI300) fell 1.51%, and Australian stocks (.AXJO) fell 0.43%. Hong Kong (.HSI) reversed the trend, up 0.63%, after closing at its lowest level since November the previous day.
“China and the Fed are the two key elements for today,” said Tai Hui, chief market strategist for Asia-Pacific, at JPMorgan Asset Management.
The main questions were whether the markets would stabilize as they dealt with news from China and whether the spread of the Delta variant posed a risk to growth in the United States and Europe, he said. added.
“We’re still trying to digest the news from China, what’s going to be new is how the Fed views the latest round of infections (COVID-19) and whether it needs to readjust its point of view,” a- he declared.
The Fed policy meeting statement and a press conference by President Jerome Powell are expected at 2:00 p.m. EDT (6:00 p.m. GMT).
Markets will be watching closely for any hints about inflation, economic growth, interest rates and when the Fed is likely to start cutting its government bond purchases.
Asian stock declines on Tuesday spilled over to other markets overnight, causing Wall Street to pull back slightly from record highs set earlier in the week.
The Dow Jones Industrial Average (.DJI) ended Tuesday down 0.2%, the S&P 500 (.SPX) lost 0.5% and the Nasdaq Composite (.IXIC) slipped 1.2%. Earlier, the pan-European STOXX 600 index (.STOXX) ended down 0.54%.
After the close in the United States, Google’s parent company Alphabet Inc (GOOGL.O), Microsoft (MSFT.O) and Apple (AAPL.O) all posted record quarterly profits, although shares in the maker of smartphones fell in trade after forecasting growth. Read more
In currency markets, the US dollar has remained below recent highs after a month of rallying, the safe haven yen gained and the risk-sensitive Australian and New Zealand dollars retreated.
CBA analysts attributed the moves to lower risk sentiment following China’s regulatory crackdown.
Oil prices rose as industry data showed US crude and commodity inventories fell more sharply than expected last week, outweighing concerns about the consequences of soaring cases of COVID-19.
US crude rose 0.47% to $ 72.01 per barrel and Brent crude rose 0.35% to $ 74.77 per barrel.
Gold was slightly lower, with spot trading at $ 1,798.45 an ounce.
Edited by Ana Nicolaci da Costa
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