Asian Shares Fall on Election Fears, Tesla Boosts Nasdaq Futures
Published: 03:10 PM,Oct 24,2024 | EDITED : 07:10 PM,Oct 24,2024
A man looks at an electronic board displaying the Nikkei stock average outside a brokerage in Tokyo— Reuters
SYDNEY: Asian shares tracked Wall Street lower on Thursday as uncertainty over the US election outcome kept investors on edge, while the dollar remained strong near its three-month high, supported by elevated Treasury yields.
Nasdaq futures rose 0.5 per cent after Tesla shares jumped 12 per cent in after-hours trading following the EV maker’s robust third-quarter profits and a forecast of 20-30 per cent growth in sales next year.
European markets are set to open higher, ahead of Purchasing Managers' Index (PMI) readings, which will gauge growth momentum in Europe. EUROSTOXX 50 futures gained 0.2 per cent, and FTSE futures rose 0.5 per cent.
In Asia, Tokyo's Nikkei rose 0.1 per cent, but MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6 per cent, pressured by declines in Chinese shares. Both Hong Kong's Hang Seng index and China’s blue chips dropped 1.2 per cent.
Overnight, Wall Street shares fell for the third consecutive day, with major losses in the 'Magnificent Seven' tech stocks ahead of their earnings results. Nvidia, for instance, dropped nearly 3 per cent.
Strong US economic data and less dovish communication from Federal Reserve officials have reduced the odds of aggressive rate cuts in the coming months. Rising expectations of a possible return of Donald Trump to the White House have added to market nerves.
US stocks ended lower on Wednesday, with megacap stocks dragging down the main indexes.
US bond yields continued to climb, with the benchmark 10-year Treasury yield hitting a three-month high of 4.26 per cent. On Thursday, yields eased slightly, down 3 basis points to 4.2157 per cent.
Mizuho analysts noted that the sell-off in both equities and bonds reflects a repricing of risk. Rising yields are driving market movements, rather than reacting to liquidation.
PIMCO economist Tiffany Wilding cautioned against overinterpreting the recent rise in bond yields, pointing out that historical patterns suggest changes in 10-year yields after the Fed’s first rate cut have not consistently signalled the magnitude of future cuts.
Strong economic data have led traders to question whether the Fed will cut rates deeply at its two remaining meetings this year. Swaps imply just 40 basis points of easing this year.
The higher yields have kept the dollar well-supported near its three-month high. It surged 1.1 per cent against the yen overnight, rising above the key 153 level, but was last down 0.3 per cent at 152.26.
The yen weakened across the board after Bank of Japan Governor Kazuo Ueda said achieving the central bank’s inflation goal was taking more time.
The rise in the dollar curbed a stellar run in gold prices, which fell more than 1 per cent overnight from their record of $2,758.37 an ounce. However, gold rebounded 0.4 per cent on Thursday to $2,729.16.
Oil prices, which had fallen on a large build in US crude stocks, recouped some losses. Brent futures were up 1.1 per cent at $75.76 a barrel. — Reuters
Nasdaq futures rose 0.5 per cent after Tesla shares jumped 12 per cent in after-hours trading following the EV maker’s robust third-quarter profits and a forecast of 20-30 per cent growth in sales next year.
European markets are set to open higher, ahead of Purchasing Managers' Index (PMI) readings, which will gauge growth momentum in Europe. EUROSTOXX 50 futures gained 0.2 per cent, and FTSE futures rose 0.5 per cent.
In Asia, Tokyo's Nikkei rose 0.1 per cent, but MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6 per cent, pressured by declines in Chinese shares. Both Hong Kong's Hang Seng index and China’s blue chips dropped 1.2 per cent.
Overnight, Wall Street shares fell for the third consecutive day, with major losses in the 'Magnificent Seven' tech stocks ahead of their earnings results. Nvidia, for instance, dropped nearly 3 per cent.
Strong US economic data and less dovish communication from Federal Reserve officials have reduced the odds of aggressive rate cuts in the coming months. Rising expectations of a possible return of Donald Trump to the White House have added to market nerves.
US stocks ended lower on Wednesday, with megacap stocks dragging down the main indexes.
US bond yields continued to climb, with the benchmark 10-year Treasury yield hitting a three-month high of 4.26 per cent. On Thursday, yields eased slightly, down 3 basis points to 4.2157 per cent.
Mizuho analysts noted that the sell-off in both equities and bonds reflects a repricing of risk. Rising yields are driving market movements, rather than reacting to liquidation.
PIMCO economist Tiffany Wilding cautioned against overinterpreting the recent rise in bond yields, pointing out that historical patterns suggest changes in 10-year yields after the Fed’s first rate cut have not consistently signalled the magnitude of future cuts.
Strong economic data have led traders to question whether the Fed will cut rates deeply at its two remaining meetings this year. Swaps imply just 40 basis points of easing this year.
The higher yields have kept the dollar well-supported near its three-month high. It surged 1.1 per cent against the yen overnight, rising above the key 153 level, but was last down 0.3 per cent at 152.26.
The yen weakened across the board after Bank of Japan Governor Kazuo Ueda said achieving the central bank’s inflation goal was taking more time.
The rise in the dollar curbed a stellar run in gold prices, which fell more than 1 per cent overnight from their record of $2,758.37 an ounce. However, gold rebounded 0.4 per cent on Thursday to $2,729.16.
Oil prices, which had fallen on a large build in US crude stocks, recouped some losses. Brent futures were up 1.1 per cent at $75.76 a barrel. — Reuters