- Major bond yields fall to lowest in over a week
- China’s Tencent, Alibaba and Meituan fall on latest rules
- Kiwi dollar near three-week low on New Zealand lockdown
- U.S. retail sales data awaited (Adds European markets, New Zealand currency falls, comments)
Global shares were rattled by concerns over China’s regulations for its once-freewheeling internet sector and a worldwide spike in COVID-19 infections driven by the Delta variant, says Reuters.
Slowing economic momentum
U.S. Treasury and German bond yields fell to the lowest in over a week ahead of the release of U.S. retail sales data due later in the day, expected to offer further signs of slowing economic momentum.
In early European trade, the pan-European STOXX 600 shed 0.5%,U.S. stock futures, the S&P 500 e-minis, were down 0.5% as the U.S. Treasury and German bond yields fell to the lowest.
Hong Kong Tech Index
The Hong Kong Tech Index, with its list of China’s largest internet giants, decreased by 3.3%; internet giants Tencent, Alibaba and Meituan fell by 4.3%, respectively 4.6% and 3.4%, when Chinese regulators issued provisions for the internet industry prohibiting unfair competition, and limiting user data use.
“Evolving government policy initiatives are weighing on sentiment and causing some uncertainty. That said, regulation is a constant in China,” said Catherine Yeung, investment director at Fidelity International.
“Investors must accept and incorporate this into their risk-reward frameworks and factor it into the assessment of the long-term business prospects for companies.”
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.5% and China’s blue-chip CSI300 index dipped 2.1%.
Shares Stumble
After the country had been placed under rigorous lockdown after the first confirmed coronavirus case in six months, the New Zealand dollar sank almost three weeks down. And the exchange rate fell by 1.4% to $0.6921.
“Entering the second half of 2021, we think the investor concern is shifting from inflation to growth globally,” said Wang Qi, CEO at MegaTrust Investment. “Inflation is still our top concern, but we are also worried about a potential economic slowdown.”
Dollar fall
After the concluding minutes of the Central Bank Meeting, the Australian dollar sank to a low of nine months, showing policymakers ready to act if the coronavirus lockdowns risk a further economic downside, with 0.7 per cent of the money down at $0.72885 a day.
As demand for safe-haven US assets surged, the yield on benchmark 10-year Treasury notes fell, signaling more risk-off behaviour. In the United States, the 10-year Treasury note yield declined to 1.25 percent from 1.257 percent at the close.
Brent crude drop
The early-trade benchmark for the bloc, Germany’s ten-year yield, fell over 3 basis points to -0.496% and US crude lost 0.6% to 66.9 US dollars per barrel. Brent crude dropped by 0.6% to 69.1 dollars a barrel, while Gold increased by 0.2%. On the spot market, gold was priced at $1,791.41 per ounce.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Reuters
