You are here
Asia: Stocks drop as investors avoid risk before Yellen speech
[KUALA LUMPUR] Asian stocks fell, led by shares in Japan, as investors showed a reluctance to take on risk before Federal Reserve Chair Janet Yellen's speech later Friday.
The MSCI Asia Pacific Index dropped 0.3 per cent to 138.50 as of 9:10 am in Tokyo. The gauge is set for its second week of declines, its longest weekly losing streak since June.
Japan's Topix index lost 0.6 per cent as the yen traded at 100.51 to the US dollar. A rally in equities lost steam this month as investors pulled back risk before a speech by Ms Yellen that may provide clues on when the world's largest economy will raise interest rates.
Odds that the Fed will boost rates in September has jumped to 32 per cent from 18 per cent at the end of July, while traders are betting there's a 57 per cent chance of tightening in December.
"Its a wait and see holding pattern now," said Chris Green, the Auckland-based director of economics and strategy at First NZ Capital Group Ltd.
"In some ways, markets may be disappointed if they are looking for clarity for the rate decision. The usual modus operandi would be not to comment explicitly."
South Korea's Kospi Index fell 0.6 per cent. Australia's S&P/ASX 200 Index dropped 0.5 per cent. New Zealand's S&P/NZX 50 Index slipped 0.1 per cent. Markets in China and Hong Kong have yet to start trading.
Futures on the China A50 Index added 0.2 per cent in their most recent trading, while contracts on Hong Kong's Hang Seng Index climbed 0.3 per cent. Chinese shares dropped on Thursday, led by property companies. Beijing and Tianjin are said to be joining Shanghai with new measures to rein in housing prices, according to people familiar with the matter.
Futures on the S&P 500 Index were little changed. The US equity benchmark index slumped to a three-week low, led by declines in drugmakers.
West Texas Intermediate crude rose 1.2 per cent on Thursday after a report that Iran's oil minister Bijan Namdar Zanganeh will participate in an informal gathering of Opec members next month in Algiers. Saudi Arabia's energy minister Khalid Al-Falih said an oil-output freeze would be "positive," while ruling out a production cut.