Tuesday, 23 April 2024

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Asian shares fall as US yields hold near 4-month high, earthquake hits By Reuters

China Jan-June non-financial outbound direct investment +0.8% y/y in yuan terms

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By Stella Qiu

SYDNEY (Reuters) – Asian shares tracked Wall Street lower on Wednesday as U.S. yields held near four-month highs, while a powerful earthquake in the region raised concerns about possible disruptions to the vital chip-making industry.

Markets are also pondering the risk of slower rate cuts ahead of U.S. data and an appearance by the world’s most powerful central banker later in the day. Oil extended its ascent, while gold prices hit another a record high.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7%. dropped 1%, after a 20% blockbuster rally in the first quarter.

Taiwan’s shares skidded 0.8% after a powerful earthquake with a magnitude of 7.2 rocked Taipei, the capital, sparking a tsunami warning for the islands of southern Japan and the Philippines.

Shares of the chip giant Taiwan Semiconductor Manufacturing Co fell 1.4% after the company said some facilities were evacuated following the quake.

China’s blue chips eased 0.3% while Hong Kong’s fell 0.6%, even as a private survey showed that the expansion in the services industry picked up pace in March.

On Wall Street, a recent run of solid U.S. economic data – including an unexpected expansion in the manufacturing sector and the slow easing in the labour market – has stoked doubts about the amount of the Fed easing likely this year and next.

A pair of Fed policymakers on Tuesday both said they think it would be “reasonable” to cut U.S. interest rates three times this year, but markets only see about 69 basis points in easing.

“At this last meeting, they still indicate three times, but these movements tend to have some momentum. As they start to shift, you find that they will probably shift again next meeting and then by next meeting, they probably will be indicating that they’re going to cut only twice,” said Andrew Lilley, chief rates strategist at Barrenjoey in Sydney.

“And there’s a very high chance of one in three, that they don’t ease at all.”

The three major Wall Street indexes fell about 0.7%-1%. Tesla (NASDAQ:) shares lost about 5% after quarterly deliveries fell for the first time in nearly four years.

Long-term Treasury yields climbed to multi-month highs overnight before paring some of the movements. The benchmark 10-year yield was last at 4.3471% on Wednesday, after hitting a four-month high of 4.405% overnight.

Investors now await euro zone inflation data, which could surprise on the downside after German inflation eased more than expected. In…

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