SYDNEY : Asian shares slipped with Wall Street on Thursday, while a sharp fall in oil prices to a five-month low promised to further reduce inflationary pressures and helped boost the global bond market.
There was also a soft reading on the U.S. labour market overnight. Analysts note the ADP private payrolls report is historically not a very reliable predictor of the official non-farm payroll report due on Friday, making the weekly jobless claims later in the day more important.
MSCI’s broadest index of
Asia-Pacific shares outside Japan dipped 0.5 per cent, having been down 1.6 per cent so far this month after a 7.3 per cent rally in November. Japan’s Nikkei fell 1.3 per cent, led by declines in energy and tech stocks.
China’s bluechips eased 0.4 per cent to inch closer to a five-year trough that it hit the previous session, after the rating agency Moody’s cut the
Asian’s giant’s credit outlook.
Hong Kong’s Hang Seng index fell 0.7 per cent to hover near a 13-month low.
Investors are awaiting Chinese trade figures later in the day to get a gauge of the strength of the world’s second largest economy.
Overnight, Wall Street was dragged lower by energy stocks as oil prices slid. The Dow Jones slipped 0.2 per cent, the S&P 500 lost 0.4 per cent, and the Nasdaq Composite fell 0.6 per cent.
Oil prices steadied after falling nearly 4 per cent overnight to their lowest settlements since June. Worries about global fuel demand drove prices lower, despite pledges from OPEC+ producers that they would keep a tight lid on supply.
“That’s probably the oil market giving you a bit of a heads up for what they think demand is going to be like over the next few months,” said Amy Xie Patrick, head of income strategies at Pendal Group.
Combined with the recent price actions in the equity and bond markets, Xie Patrick said the markets were starting to worry whether the global economy could be heading to a hard landing next year.
“Even though bond yields have continued to fall, equity markets are no longer rallying, credit spreads are no longer tightening. The markets are starting to wonder whether this is a good kind of bond yield rally or is the bond market telling you something a little bit more sinister.” Source: Reuters
