Asian Stocks Retreat After US Shares Hit Record: Markets Wrap – Yahoo Finance

March 21, 2024

(Bloomberg) — Asian stocks retreated Friday as U.S. stocks hit another all-time high and investors parsed economic data for signals on the trajectory of interest rates around the world.

Most Read Articles on Bloomberg

Stock prices in Australia and South Korea fell, but Japanese stocks rose slightly. Hong Kong and China both started lower. The move followed a sharp rally on Thursday for the region’s stock index, which hit its highest level in nearly two years.

U.S. stock contracts rose in early Asian trading as the S&P 500 rose 0.3% on Thursday (for the 20th time this year) to a new high led by gains in industrial and banking stocks. Reddit Inc.’s stock price soared 48% upon its debut.

“The Reserve Bank of Australia, the Federal Reserve, the Swiss National Bank and the Bank of England have joined the dovish chorus this week,” IG Australia market analyst Tony Sycamore said. Central banks are interested in growth rather than inflation. It concludes with expectations that interest rate cuts will tighten and growth prospects are thwarted. ”

Some U.S. tech stocks slumped, with Apple and Alphabet falling amid increased regulatory pressure. The U.S. Department of Justice and 16 attorneys general are suing the iPhone maker for antitrust violations.

U.S. economic data supported arguments that the Fed may be forced to backtrack on its outlook for rate cuts, a day after it signaled three 25 basis point rate cuts in 2024. The economy’s resilience may be undermined and the Fed may cut interest rates more slowly than the market expects.

Both the U.S. Treasury and dollar index were strong on Friday.

The yen was little changed, trading around 152 yen to the dollar, as Japan’s inflation accelerated to its fastest pace in four months. The market remains focused on whether the Bank of Japan will raise interest rates further this year, following its first interest rate hike since 2007.

The onshore yuan fell to a four-month low, breaking through a closely watched technical level after months of efforts by Chinese authorities to keep the currency within a narrow range.

Expected rise

Societe Generale SA raised its year-end forecast for the S&P 500 index to 5,500 from 4,750. This is the highest forecast among strategists tracked by Bloomberg. “American exceptionalism is growing stronger,” wrote Manish Kabra, head of U.S. equity strategy at the French bank. “Despite widespread optimism in the market, we think this is reasonable rather than overdone.”

Central banks remain firmly focused. The Swiss National Bank unexpectedly cut interest rates on Thursday, sending the currency weaker against the country’s currency, while Mexico’s central bank cut rates as expected. The Bank of England kept interest rates unchanged at 5.25%, the highest level in 16 years.

The Reserve Bank of Australia released its financial stability review on Friday.

Taiwan will be the first in Asia to release employment statistics for February.

In commodity markets, oil fell for a second straight day as traders assessed the outlook for global interest rates and geopolitical tensions in the Middle East. Elsewhere, Bitcoin traded below $66,000, while gold fell after soaring above $2,200 an ounce for the first time.

This week’s main events: