SYDNEY- Asian shares fell on Monday, dragged by China, after central banks last week reinforced the message that interest rates would stay higher for longer, while investors braced for inflation data from the US and Europe.
The yen was jittery near the closely watched 150 per dollar level amid intervention fears, after the Bank of Japan made no change to its dovish monetary policy.
Europe is set for a subdued open, with EUROSTOXX 50 futures off 0.3 percent . S&P 500 futures however, rose 0.3 percent while Nasdaq futures gained 0.4 percent , after Hollywood’s writers union reached a preliminary labor agreement with major studios.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.5 percent , edging back to a 10-month low plumbed just last week. Japan’s Nikkei on the other hand, rose 0.9 percent , as investors bought beaten-down shares.
Chinese shares fell after a rebound on Friday, as property concerns and pre-holiday caution weighed. The blue chips index eased 0.5 percent and Hong Kong’s Hang Seng index slumped 1.2 percent as Chinese property developers dived more than 3 percent .
Evergrande, the embattled developer, said late on Sunday it was unable to issue new debt due to an ongoing investigation into its main domestic subsidiary, Hengda Real Estate Group Co Ltd, the latest trouble in firming up a debt restructuring plan.
S&P on Monday lowered its forecast for China’s economic growth to 4.8 percent in 2023 from 5.2 percent , and to 4.4 percent in 2024 from 4.8 percent , saying the fiscal and monetary easing had remained limited.
“Policymakers’ emphasis on containing leverage and financial risks has increased the bar for macro stimulus,” said Louis Kuijs, Asia-Pacific chief economist.
Markets will be looking for clues on whether China’s economy is regaining traction, with a week-long national holiday set to begin on Friday that will be a key test for consumer spending. – Reuters
