Asian Stocks Slip as Tech Drags, China Fluctuates: Markets Wrap

(Bloomberg) -- Stocks in Asia declined as investors weighed if the artificial intelligence rally still has room to run. Chinese stocks fluctuated ahead of a press briefing on Thursday.

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MSCI’s Asia Pacific Index fell for a third session, with chip stocks including SK Hynix Inc. and Samsung Electronics Co Ltd notching losses after tepid outlook from key equipment supplier ASML Holding NV. Futures for US stocks edged higher, while those for European equities slipped. Treasuries were steady during trading in Asia.

Chinese shares swung between gains and losses on Wednesday, while a Bloomberg gauge of China’s property shares rose as markets prepared for Thursday’s news conference by the nation’s housing minister. The focus will be on promoting what was called the steady and healthy development of the sector.

Volatility in Chinese stocks has been high since late September, when a series of stimulus measures by the central bank unleashed a burst of optimism that’s now quickly cooling. Expectations are now growing to see if authorities are willing to deploy greater firepower to turn around the economy and markets.

Any announcements “may only help property stocks for one or two days, but not the overall market,” said Kenny Wen, head of investment strategy at KGI Asia Ltd, referring to the briefing. “Only the property sector will be benefit and investors are still waiting for several trillion fiscal package.”

The warning from Netherlands-based ASML threw cold water on the mounting rally from a summer selloff. ASML’s peers including Tokyo Electron Ltd. and top foundry Taiwan Semiconductor Manufacturing Co. fell during Asian trading hours. In the US, Nvidia Corp. lost 4.7%, signaling a slowdown for some of the biggest bellwethers of the industry.

“The tech-led retreat triggered by the slump in chipmakers not only echoes earlier skepticism over the AI-driven rally but, more broadly, the slowdown in this economy-sensitive industry certainly does not bode well for the global economic outlook,” said Hebe Chen, an analyst at IG Markets.

In the US, the S&P 500 slipped to around 5,815 and the Nasdaq 100 lost 1.4%. The dollar steadied after climbing to its highest level in about two months after former President Donald Trump defended proposals to dramatically raise tariffs on foreign imports. Separately, Fed Bank of Atlanta President Raphael Bostic said he expects the US economy to slow this year but to remain robust, adding that the downward path for inflation could see some bumps.

Back in Asia, the yen traded at around 149 per dollar after Bank of Japan Board Member Seiji Adachi emphasized the need for taking a gradual approach to raising the benchmark interest rate. New Zealand’s dollar and sovereign bond yields fell after the annual inflation rate declined sharply in the third quarter, returning to the central bank’s target band for the first time in more than three years.

Elsewhere, three of Southeast Asia’s biggest economies will unveil monetary policy decisions later Wednesday. Indonesia and Thailand are expected to keep rates on hold, while a cut is seen in the Philippines.

Oil Gains

Oil climbed — after falling by more than 4% on Tuesday — as Israel said it would make its own decision on how to attack Iran, keeping open the possibility that energy infrastructure may be targeted.

Crude has had a roller-coaster ride this month, with prices buffeted by tensions in the Middle East, as well as China’s efforts to revive growth in the largest importer. Traders have also been weighing the market’s outlook into next year, with the International Energy Agency flagging prospects for a global glut.

“It looks like dealers simply have their machines tied to oil futures these days,” said Christoph Rieger, head of rates and credit research at Commerzbank AG. “Whether it makes sense to adjust your long-term inflation view on the back of this is a different question.”

In other commodities, iron ore futures advanced to just below $107 a ton in Singapore after swinging between gains and losses. Meanwhile, gold advanced.

Key events this week:

Morgan Stanley earnings, Wednesday

ECB rate decision, Thursday

US retail sales, jobless claims, industrial production, Thursday

Fed’s Austan Goolsbee speaks, Thursday

China GDP, Friday

US housing starts, Friday

Fed’s Christopher Waller, Neel Kashkari speak, Friday

Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 5:44 a.m. London time

Nikkei 225 futures (OSE) fell 1.8%

Japan’s Topix fell 1.1%

Australia’s S&P/ASX 200 fell 0.3%

Hong Kong’s Hang Seng rose 0.9%

The Shanghai Composite rose 0.4%

Euro Stoxx 50 futures fell 0.6%

Currencies

The Bloomberg Dollar Spot Index was little changed

The euro was little changed at $1.0890

The Japanese yen was little changed at 149.23 per dollar

The offshore yuan rose 0.1% to 7.1263 per dollar

The Australian dollar fell 0.1% to $0.6694

Cryptocurrencies

Bitcoin rose 0.7% to $66,942.32

Ether rose 1.4% to $2,609.12

Bonds

The yield on 10-year Treasuries was little changed at 4.03%

Japan’s 10-year yield declined two basis points to 0.950%

Australia’s 10-year yield declined five basis points to 4.21%

Commodities

West Texas Intermediate crude rose 0.4% to $70.88 a barrel

Spot gold rose 0.2% to $2,667.75 an ounce

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Kurt Schussler, Yuling Yang, Jake Lloyd-Smith and Zhu Lin.