Asian shares hit speed bump, China extends sharp rally
Asian shares paused for breath on Tuesday following a surge sparked by speculation Beijing is trying to ochestrate a major domestic bull run to support an economy hit by the coronavirus and a standoff with Washington.
- MSCI’s broadest index of Asia-Pacific shares outside Japan was last down 0.25%, a seemingly inevitable correction after sharp gains of 7% in just five days that took it to a 4-1/2-month high.
- Japan’s Nikkei gave up 0.7% while U.S. stock futures shed 0.3% in Asia after hefty gains on Monday in the wake of surging Chinese shares.
- Bluechip CSI300 index of Shanghai and Shenzhen shares , which had gained more than 13 in the past five sessions, gained another 1.7%, led by rises in tech sector
- In the currency market, the Chinese yuan made headway, hitting its highest levels in nearly four months.
- The renminbi rose 0.1% to 7.0115 per dollar.
- “The yuan is supported by the risk-on mood in the Chinese share market despite lingering uncertainties over the U.S.-China relations and an anticipated slow pace of recovery,” said Ei Kaku, senior strategist at Nomura Securities.
- “Nor have we seen large capital flows that would boost the yuan,” she said.
- Other major currencies were little changed, with the yen flat at 107.37 to the dollar and the euro unchanged at $1.1312.
- The Aussie was steady at $0.6964.
- Gold held steady near 8-year peak, changing hands at $1,783.3 per ounce.
- Oil prices eased in tandem with the pullback in stocks.
- Brent crude lost 0.66% to $42.83 per barrel.
- U.S. West Texas Intermediate crude fell 0.64% to $40.37.