Asian stocks slip after European surge fades, dollar extends bounce


TOKYO (Reuters) – Asian stocks slipped on Tuesday, their recent recovery stalling after European equities broke a winning streak, while the dollar edged further away from three-year lows. Spreadbetters expected a mixed start for European stocks, with Britain’s FTSE seen rising 0.1 percent, Germany’s DAX dropping 0.1 percent and France’s CAC dipping 0.07 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.25 percent. Australian stocks were little changed, South Korea’s KOSPI lost 1.2 percent and Hong Kong’s Hang Seng dropped 0.4 percent. Japan’s Nikkei retreated 1 percent after three successive days of gains. The pan-European STOXX index fell 0.6 percent on Monday following a three-day ascent, dragged down by falls in consumer staples stocks. [.EU] U.S. markets were closed on Monday for a holiday, and the focus will be on whether Wall Street can maintain its recovery once trading resumes. The Dow gained 4.5 percent last week, winning back more than half of the territory lost during a sharp downturn earlier in the month. “Whether other markets can continue their recovery depends to a large degree on how U.S. stocks perform,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo. “Volatility will also have to keep settling for the broader recovery to continue,” he said. The VIX index – Wall Street’s “fear gauge” measure of market volatility – has slipped below 20, less than half the 50-point peak touched earlier in February. Upbeat prospects for global growth helped lift world stocks to record highs earlier this year, although slow wage increases have been a common issue for many economies. For example Japan has marked its longest economic expansion since the 1980s but wage increases have remained elusive amid long stretches of deflation. A monthly Reuters survey showed that more than half of companies in the world’s third largest economy do not plan to raise base pay in annual wage talks in coming months. DOLLAR PULLS AWAY FROM 3-YEAR LOWS The dollar index against a basket of six major currencies was 0.3 percent higher at 89.346, continuing its rebound from a three-year low of 88.253 set on Friday. The dollar added 0.15 percent to 106.760 yen and the euro dipped 0.15 percent to $1.2387 . Oil prices were mixed, with reduced flows from Canada pushing up U.S. crude while Brent sagged on the back of weaker Asian stocks and the dollar’s bounce. U.S. crude futures were 1 percent higher at $62.32 per barrel after touching $62.74, the highest since Feb. 7. Brent lost 0.35 percent to $65.45 per barrel. Overall, oil markets remain well supported due to supply restraint by the Organisation of Petroleum Exporting Countries (OPEC). “OPEC and Russia continue to support the production cuts that are due to expire at the end of this year, and they assure markets that there will be an orderly ramp up of production once the cuts expire,” said William O‘Loughlin, investment analyst at Australia’s Rivkin Securities. Spot gold slipped 0.4 percent to 1,341.06 an ounce, weighed by the dollar’s bounce. Reporting by Shinichi Saoshiro; Additional reporting by Henning Gloystein in Singapore; Editing by Simon Cameron-MooreOur Standards:The Thomson Reuters Trust Principles.
Source: Reuters