Stocks steady

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    SINGAPORE/NEW YORK- Asia’s stock markets struggled to emulate Wall Street’s rebound on Wednesday as persistent worries about the global economic recovery kept investors cautious, while ebbing inflation expectations helped the US dollar to a two-month high.

    MSCI’s broadest index of Asia-Pacific shares outside Japan was steady after two days of declines, but the mood was hardly bullish.

    Japan’s Nikkei returned from a two-day holiday to drop 0.6 percent. Markets in Shanghai and Hong Kong opened flat, the ASX 200 rose 1.6 percent and South Korea’s Kospi fell 0.8 percent on a jump in coronavirus infections.

    “I think that reflects a lingering caution. The pandemic is still a concern…non-tech stocks are still weighed down by COVID-19,” said Bank of Singapore analyst Moh Siong Sim.

    Foreign exchange markets best reflected those worries and a strong dollar kept Asia’s currencies on the back foot, extending gains that had begun with hawkish remarks from a senior US Federal Reserve official overnight.

    The greenback has busted out of a downtrend that started in March and it rose 0.2 percent against a basket of currencies to its highest since late July.

    It gained by the same margin against the euro and yen and a little further against the Aussie to hit a six-week peak. The kiwi flickered higher after the central bank left rates on hold, as expected, but pressure soon returned.

    “There looks to be a squeeze on dollar shorts,” said Westpac FX analyst Sean Callow, with jitters in the equity markets, a stalling euro and no new stimulus from the US Federal Reserve to keep it under pressure.