Asia-Pacific equities are seeing sharp, broad declines after world stocks stepped back from record highs overnight, reports FTAdviser sister title FastFT.
The MSCI Asia Pacific index tumbled 0.7 per cent, on track for its first fall in six sessions after finishing Wednesday at its highest peak since June 2008.
Overnight, the FTSE All-World equity index slipped 0.2 per cent, breaking a five-day streak, while the S&P 500 fell 0.4 per cent - its biggest fall in three weeks.
“While the downward revision to growth forecast by the World Bank did not help sentiment, profit taking at high levels was perhaps the more dominant element and it remains to be seen how long this correction will last,” said Gary Yau at Credit Agricole.
Among stocks bucking the trend, shares of Mitsubishi Heavy Industries are up nearly 2 per cent after the Japanese maker of turbines, aircrafts and more said it would join forces with German engineering group Siemens AG in a bid to buy Alstom’s energy business.
Down under, the Australian market has hardly moved after a mixed jobs report.
Government data said the economy lost 4,800 jobs in May, versus predictions for a gain of 10,000. But all of the losses were for part-time work (-27,000), while full-time jobs saw a jump of 22,000.
The jobless rate held steady at 5.8 per cent, but only because the labour participation rate fell for a third consecutive month. In other words, fewer people were counted as looking for work.
Annette Beacher at TD Securities said the report had something for everyone.
The drop in total payrolls and a fall in the participation rate “supported the doves” while steady employment and a shift into full-time jobs “supports the bullish.”
Meantime, the Kiwi dollar has extended its session gain to 1.1 per cent - on track for its biggest climb in five months - after the Reserve Bank of New Zealand hiked interest rates for a third time this year and gave no indication that the tightening cycle was over.
The quarter point hike to 3.25 per cent was widely anticipated, but a hawkish statement from RBNZ Governor Graeme Wheeler forced the market to re-evaluate their forecasts.
In South Korea, equities fell in sympathy with global sentiment, but were little changed after the Bank of Korea held its key interest rates at 2.5 per cent for a 13th consecutive month, as widely predicted.
This is the third monetary policy decision under Lee Ju-Yeo, a 35-year veteran of the bank who took over in April.
“With the new governor giving no indication that a change in the monetary policy stance is imminent, it seems safe to expect that monetary policy is going to be left on hold for a while yet,” said Gareth Leather at Capital Economics.
Key markets at 11am in Hong Kong:
Japan’s Nikkei 225: -0.8%
Hong Kong’s Hang Seng: -0.4%
Shanghai Composite: -0.3%
S&P/ASX 200: -0.3%
Korea’s Kospi: -0.3%
