SYDNEY- Asian shares retreated from two-week highs on Thursday and China started on the backfoot on fears central banks were closer to considering winding back their emergency stimulus while the dollar held at a one-week top.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.5 percent at 691.76, still not too far from Wednesday’s high of 696.76, a level last seen on May 10.
Chinese shares started weaker with the blue-chip index off 0.2 percent.
Australian shares were flat while New Zealand’s benchmark index stumbled 0.9 percent, extending losses for a second day in a row after the country’s central bank on Wednesday signaled rate rises from next year.
Japan’s Nikkei was down 0.8 percent. E-Mini futures for the S&P 500 were down 0.2 percent.
Global equities markets have been supported by a concerted effort from major central banks who have pumped trillions of dollars in financial markets since last year while reiterating their lower-for-longer interest rate stance as they seek to cast any inflation rise as temporary.
Earlier this week, US Federal Reserve Vice Chair Richard Clarida said he believed recent inflation pressures would “prove to be largely transitory,” though he did add that policymakers will be at a point to begin discussing tapering in upcoming meetings.
“While the efforts by various Fed speakers appeared to have assuaged market concerns, doubt remains,” said GSFM investment strategist Stephen Miller.
“Clarida’s comments imply that the Fed may be a little bit more advanced than the ‘not thinking about thinking’ about monetary tightening that Chairman Jerome Powell characterized as the Fed’s stance last year – but only just a bit.”
Overnight, the Fed Vice Chair for supervision, Randal Quarles, suggested that at some stage it will become important for the Fed to discuss plans to tighten its asset purchase program. – Reuters
Author
