Asian stocks fell as investors approached the end of the quarter with the Trump administration attempting to move ahead with its legislative agenda while Federal Reserve officials consider the frequency of interest-rate increases. The yen weakened and crude extended Wednesday’s surge.
The Shanghai Composite Index headed for the biggest decline since December, while equities in Japan, South Korea and Singapore also fell. Australian shares rose as energy producers rallied. Crude approached $50 a barrel as oil stockpiles increased less than forecast. Treasuries dropped after Wednesday’s advance, while gold slipped.
Gains in riskier assets have pushed the value of global stocks to $71 trillion, with shares heading toward a fifth month of gains, as the reflation trade triggered by Trump’s election shows resilience. Stronger global growth has helped underpin the rally, even amid doubts about the U.S. president’s ability to enact pro-growth policies.
U.S. House Republicans are considering making another run next week at passing the health-care bill they abruptly pulled from the floor. The renewed discussion comes after President Donald Trump and Republican leaders in Congress said they would move on to issues like a tax overhaul.
Meanwhile, Fed officials continued to offer views on the potential path for interest-rate hikes. Fed Bank of Boston President Eric Rosengren said the central bank should be prepared to raise rates a total of four times in 2017 to guard against overheating the U.S. economy.
Investors are also weighing the impact after the U.K.’s formal triggering of Brexit Wednesday. While the move had been broadly telegraphed, the divorce will redefine the country’s relationship with its largest trading partner and end decades of deepening political integration on the continent.
Here are key events the rest of this week:
- Other Fed officials are scheduled to make appearances, including Bank of Cleveland President Loretta Mester and Bank of Dallas President Robert Kaplan.
- The U.S. reports its third estimate for fourth-quarter gross domestic product on Thursday, while Friday’s data include data on personal spending and incomes.
Here are the major moves in the markets:
- Japan’s Topix fell 0.6 percent as of 1:58 p.m. in Tokyo. The index is up 0.9 percent for the quarter, despite the yen’s strengthening this year.
- Australia’s S&P/ASX 200 index climbed 0.4 percent, gaining for a third day to the highest since May 2015 as energy shares jumped. New Zealand’s S&P/NZX 50 gained 0.5 percent.
- Hong Kong’s Hang Seng fell 0.5 percent, and the Hang Seng China Enterprises Index lost 1 percent. The Shanghai Composite dropped 1.1 percent, falling for a fourth straight day.
- Futures on the S&P 500 Index increased 0.1 percent. The benchmark gauge rose 0.1 percent on Wednesday. The Stoxx Europe 600 Index added 0.3 percent to the highest since December 2015.
- The Bloomberg Dollar Spot Index rose 0.1 percent. The yen slid 0.2 percent, paring its gain for the quarter to 5.2 percent. The Australian dollar lost 0.1 percent.
- The euro fell 0.1 percent, after declining 0.9 percent over the previous two days.
- Yields on 10-year Treasuries rose one basis point to 2.39 percent. The rate has alternated between gains and losses over the past four days.
- Australian 10-year yields fell three basis points to 2.69 percent.
- Oil climbed 0.4 percent to $49.73 a barrel, after surging 2.4 percent on Wednesday as a bigger-than-forecast decline in U.S. gasoline stockpiles countered an expansion of crude production to the highest level in more than a year.
- Gold slipped 0.3 percent to $1,249.92 an ounce. The metal is still up 8.9 percent for the quarter.