ASIAN STOCKS SLUMP AFTER CHINA DATA DIDN’T IMPRESS INVESTORS
Asian shares fell on Friday after lackluster Chinese economic data and worries about a delay in U.S. fiscal stimulus discouraged some investors from taking on risk. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.24%, although shares in Japan rose 0.07%, Stanley White and Lawrence Delevingne reported for Reuters.
South Korean stocks fell 1.27% after authorities reported the largest number of new coronavirus cases since March. Chinese shares erased early gains and fell 0.1% as a slower-than-expected rise in industrial production and a surprise fall in retail sales weighed on investor sentiment. E-mini futures for the S&P 500 rose 0.23%.
Yields on US Treasuries remained elevated after an auction of 30-year bonds on Thursday was met with weak demand. Further equity gains are likely to be limited as investors await progress in negotiations over US economic stimulus, which is necessary to prevent a nascent recovery in the world’s largest economy from sliding into reverse.
The S&P 500 ended slightly lower on Thursday after briefly trading above its record closing high level for a second day as doubts about US stimulus measures took hold. “Many say that the best treatment for altitude sickness is to stop and rest where you are,” Rodrigo Catril, Senior FX Strategist at National Australia Bank in Sydney, wrote in a note about the slight pullback in US stocks and government bonds. The mood was cautious in Asia after Chinese retail sales unexpectedly fell in July, suggesting domestic demand is still struggling after the coronavirus outbreak. Some traders stuck to the sidelines before a meeting between US and Chinese officials about their Phase 1 trade deal on Saturday. Spot gold held steady at $1,952.41, close to a record high set last week in another sign of cautious sentiment.