Asian stocks slide with oil on recession jitters; dollar drops

A man wearing a protective face mask, amid the coronavirus disease (COVID-19) pandemic, walks past a screen showing the Shanghai Composite Index, the Nikkei Index and the Dow Jones Industrial Average outside a brokerage in Tokyo, Japan, February 14, 2022. REUTERS/ Kim Kyung Hoon

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TOKYO, Aug 2 (Reuters) – Asian stocks continued to slide against Wall Street on Tuesday, and long-term U.S. Treasury yields fell to a four-month low, pulling the U.S. dollar higher against the yen and lower. other currencies as investors worried about the risk of a global recession.

There were also concerns about an escalation in US-China tensions with US House of Representatives Speaker Nancy Pelosi set to begin a visit to Taiwan over objections from China, which considers the island self-governing. as a separatist province. Read more

Australian stocks fell amid an uncertain outlook for commodity demand – which also weighed on crude oil prices – while the local dollar hovered near its highest against its US counterpart since mid -June, with the central bank widely expected to offer a third consecutive interest of half a point. rate hike later in the day.

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The Australian (.AXJO) and South Korean (.KS11) benchmarks suffered losses of around 0.3% each, while the Japanese Nikkei (.N225) fell 1.17%.

Chinese blue chips (.CSI300) fell 1.06% and Hong Kong’s Hang Seng (.HSI) lost 1.1%.

Taiwan’s stock market index (.TWII) slipped 1.68%.

MSCI’s broadest index of Asia-Pacific stocks (.MIAP00000PUS) fell 0.8%.

US e-mini stock futures pointed to a 0.31% lower restart for the S&P 500 (.SPX), which tumbled 0.28% overnight.

The week started with China, Europe and the United States reporting weakening factory activity, with that of the United States slowing to its lowest level since August 2020. read more

That crude sank, as Brent futures fell to $99.74 on Tuesday after losing nearly $4 overnight. US West Texas Intermediate futures also fell to $93.67, extending Monday’s near $5 drop.

“The release of data over the past 24 hours has provided further evidence that the global economy is slowing,” National Australia Bank strategist Rodrigo Catril wrote in a note to clients.

“Signs of a slowdown are forming” in the United States, while China’s “burst of reopening activity is over,” he said.

The benchmark 10-year US Treasury yield fell to 2.53% in Tokyo trade, the lowest since April 5, as slowdown bets could prompt the US Federal Reserve to ease the tightening pedal Politics. The bonds also benefited from security demand ahead of Pelosi’s visit to Taiwan, analysts said.

This helped the US dollar slide as low as 130.595 yen for the first time since June 6. The euro surged as high as $1.0294, a level not seen since July 5.

The Taiwanese dollar slipped to its lowest level in more than two years, to the weaker side of 30 to the US dollar.

Meanwhile, the Aussie was more subdued, falling 0.26% to $0.7009, but after hitting the high since June 17 at $0.7048 in the previous session.

Analysts polled by Reuters expect the Reserve Bank of Australia to rise 50 basis points on Tuesday and again at its next meeting in September as it races to contain inflation. Read more

Market participants also see a half-point hike later as a certainty and have priced a further 37 basis point tightening for the September decision.

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Reporting by Kevin Buckland

Our standards: The Thomson Reuters Trust Principles.

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