SINGAPORE- Stock markets struggled for traction on Thursday after a jittery session on Wall Street where cryptocurrencies crashed and a hint of tapering talk from the US Federal Reserve drove selling in the bond market and lifted the safe-haven dollar.
Benchmarks in South Korea and Japan were either side of flat in morning trade and Hong Kong’s Hang Seng fell about 0.8 percent to pull MSCI’s broadest index of Asia-Pacific shares outside Japan down by 0.2 percent.
Bitcoin, which plunged as much as 30 percent to $30,000 overnight, was struggling for support around $36,000. US stock futures wobbled just below flat.
Commodities also fell, Treasuries nursed losses while the dollar held overnight gains.
Fed minutes published on Wednesday said “a number” of officials thought that if the recovery holds up, it might be appropriate to “begin discussing a plan for adjusting the pace of asset purchases”.
“This is very much the market view, really,” ING economist Rob Carnell said on the phone from Singapore, with traders expecting strong hints over summer that the taper is coming and that policy support could start to ease in December.
“This is taking us to where we think we’re going to go, and perhaps this removes a little bit of uncertainty around that – so you get a slight increase in bond yields and the dollar rallying a little bit.”
The yield on benchmark 10-year US Treasuries rose 4.1 basis points overnight to 1.6830 percent and dipped to 1.6676 percent early in Tokyo trade. The dollar scraped itself off a four-month low to hover around $1.2183 per euro. – Reuters
