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GLOBAL MARKETS-Asia shares wallow near one-month lows on inflation anxiety

Published 12/05/2021, 10:46 am
Updated 12/05/2021, 10:48 am
© Reuters.
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* Asian stock markets : https://tmsnrt.rs/2zpUAr4

SYDNEY, May 12 (Reuters) - Asian shares languished near one-month lows on Wednesday as investors speculated surging commodity prices and growing inflationary pressure in the United States could lead to earlier rate hikes and higher bond yields globally.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.1%, after tumbling 1.6% on Tuesday for its biggest daily percentage drop since March 24.

"There isn't a clear catalyst behind this purge," said Marios Hadjikyriacos, investment analyst for XM.

"It seems to be a combination of inflation fears making a comeback and some market participants moving higher along the value spectrum, cutting their exposure to anything with a stretched valuation."

At 683.8 points, the regional index is not too far from a record high of 745.89 touched in February and is still up 3% this year so far, on top of a 19% jump in 2020 and a near 16% rise in 2019.

Japan's Nikkei .N225 rose 0.6%.

Australia shares skidded 0.4% while South Korea's KOSPI index .KS11 slipped 0.1%.

Some analysts said the fact the sell-off was largely contained to technology shares suggested that investors were merely moving away from more speculative plays, rather than entirely losing faith in the economic outlook.

"Indeed, this correction could even calm some 'bubble' concerns, considering what is being sold," Hadjikyriacos said.

Analysts, however, doubt the sell-off would extend much further in a world of easy accommodative policy and fiscal largesse.

Overnight on Wall Street, technology stocks were again among the biggest losers though the tech-focused Nasdaq .IXIC reversed the bulk of its early 2% decline over the course of the day. The Dow .DJI dropped 1.4% and the S&P 500 .SPX fell 0.9%.

The equity rout barely helped drive any safe haven flows into the greenback, and futures pointed to a mildly positive open for Wall Street. E-mini futures for the S&P 500 ESc1 nudged 0.1% higher in early Asian trading.

All eyes are now on the U.S. consumer price index report to be released by the U.S. Labor Department on Wednesday with market-based measures of inflation expectations having moved higher US5YTIP=RR US10YTIP=RR .

Treasury yields have remained stuck to a tight range. The yield on benchmark 10-year Treasuries US10YT=RR edged up to 1.6306%, still a far cry from the 2% level seen in before the coronavirus pandemic. US/

The dollar was up 0.1% against the Japanese yen JPY= at 108.74 as it meandered in a narrow 107-110 band.

The dollar index =USD , which measures the greenback against six major currencies, was little changed at 90.219, after touching a two-month low of 89.979. USD/

The currencies of major natural resource suppliers such as Canada stood firm amid rising commodity prices.

The loonie CAD=D3 held near a 3-1/2-year high of C$1.2078.

The Australian dollar AUD=D3 , another proxy for commodity prices, was not far from a 10-week high of $0.7891 struck on Monday.

Oil prices were lifted by fears of a gasoline shortage after a cyber attack caused an outage at the largest U.S. fuel pipeline system.

U.S. crude CLc1 gained 35 cents to $65.63 a barrel. Brent crude LCOc1 added 32 cents to $68.87 per barrel. O/R

Spot gold was off a shade at $1,836.2 an ounce. XAU=

In cryptocurrencies, ether ETH=BTSP hovered near record highs touched on Monday to be at $4,178.6. The value of the second-biggest digital token has surged over 5.5 times so far this year.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Shri Navaratnam)

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