Asian Stocks Down in Light Trading
HONG KONG — Asian shares slipped along with commodities Tuesday morning in a reversal of the previous day’s solid gains, with many investors sticking to the sidelines and awaiting more clues as to whether the economic recovery is picking up steam.
The Shanghai composite index slid 3.4 percent as cautious remarks from the Chinese prime minister, Wen Jiabao, on Monday stirred worries about the recovery. But the drop had limited fallout on other markets.
Investors showed little reaction to the news that the Federal Reserve chairman, Ben S. Bernanke, would be reappointed for another term at the helm of the U.S. central bank. Analysts said the decision removed uncertainty about the outlook for American monetary policy and was neutral for U.S. assets.
Some analysts had said that a decision not to reappoint Mr. Bernanke would have been a negative, risking politicizing the post at a time when investors are worried about record U.S. deficits.
“When you look at responses to last year’s financial crisis, bold action was taken and the market reacted to that favorably,” said Takahide Nagasaki, the chief FX strategist at Daiwa Securities SMBC in Tokyo. “I don’t think there will be any major impact, but it should be positive for stock and bond markets in the sense that an element of uncertainty has been removed.”
The MSCI index of Asia-Pacific shares outside Japan dropped 1 percent. The index is still up about 47 percent for the year and near an 11-month high struck earlier in the month.
Share trading volumes were very light for a second day running, leading to exaggerated moves across markets.
The Nikkei average in Japan shed 0.8 percent after jumping 3.4 percent the previous days. Foreign investors, which increasingly have been moving funds back into Japanese shares in the past few weeks, are keeping an eye on Japan’s Aug. 30 general election. Many expect a victory by the opposition Democratic Party but remain hesitant about taking big positions before the results are in.
The dollar dipped against the yen and was down slightly against a basket of currencies, with the yen rebounding after a broad slide the previous day as market players favored riskier assets, including higher-yielding currencies.
The dollar shed 0.6 percent, to ¥93.90. The Australian dollar, the highest-yielding of major currencies, dipped 0.2 percent to $0.8354 and dropped nearly 1 percent to ¥78.45.
Gold prices gained on the dollar’s woes, rising $4.45 an ounce to $945.85. But oil prices pulled back, losing 58 cents a barrel to $73.79 after reaching a 10-month high of $74.81 on Monday.
Safe-haven government bonds moved higher on the retreat in shares and gains in U.S. Treasuries the previous day. September Japanese government bond futures edged up 0.17 points, and the benchmark 10-year JGB yield dipped half a basis point to 1.320 percent, back near a five-week low struck last week.
Asian Stocks Down in Light Trading
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