Asia stocks slip, dol­lar un­der­pinned by yield premium

Sun.Star Pampanga - - BUSINESS! -

SYD­NEY - Asian shares slipped on Thurs­day af­ter Wall Street suf­fered a mild set­back af­ter weeks of gains, while the dol­lar stayed in de­mand as U.S. govern­ment debt of­fered ev­er­fat­ter pre­mi­ums over euro zone bonds.

Ja­pan's Nikkei lost 0.7 per­cent, edg­ing away from its re­cent one-year top. Aus­tralia's main in­dex eased 0.4 per­cent, hav­ing touched a 17-month peak the pre­vi­ous d ay.

MSCI's broad­est in­dex of Asia-Pa­cific shares out­side Ja­pan was off a slight 0.1 per­cent.

The pull­back on Wall Street came amid light vol­umes and likely re­flected cau­tion about what the New Year might bring, given Wed­nes­day was the first ses­sion when trades ac­tu­ally set­tle in Jan­uary.

The Dow fell 0.56 per­cent, while the S&P 500 lost 0.84 per­cent and the Nas­daq 0.89 per­cent. Boe­ing fell 0.9 per­cent af­ter Delta Air Lines can­celed a $4-bil­lion or­der for 18 Dream­liner air­craft.

Tech­nol­ogy was the largest weight on ma­jor in­dexes, with Nvidia down 6.9 per­cent af­ter short seller Citron Re­search said the mar­ket was over­look­ing the head­winds for the stock - which had ear­lier touched a record high.

Weak home sales data were blamed for some of the sell­ing, though nor­mally this se­ries barely gets a men­tion in mar­kets.

Con­tracts to buy pre­vi­ously-owned U.S. homes fell in Novem­ber to their low­est level in nearly a year, a hint of how ris­ing mort­gage rates could weigh on the hous­ing mar­ket.

The soft re­port com­bined with sur­pris­ingly strong de­mand for a sale of new five-year Trea­sury notes to give U.S. bonds a rare rally. Yields on 10year pa­per fell to their low­est lev­els in two weeks to around 2.503 per­cent.

Yet euro zone yields were also fall­ing on con­cerns about the strength of a res­cue plan for Ital­ian banks and nor­mal year-end cau­tion.

Ger­many's 10-year yields hit their low­est in seven weeks at 0.181 per­cent, while their dis­count to Trea­sury yields hit the widest on record.

The ever-widen­ing yield gap kept the euro on the de­fen­sive around $1.0424, af­ter touch­ing an eight-ses­sion trough of $1.0372. Ster­ling was also soft at $1.2226 af­ter hit­ting its low­est in two months.

The dol­lar was side­lined on the yen at 117.00 hav­ing spent the last seven ses­sions caught b et w een 116.84 and 117.88.

In com­mod­ity mar­kets, oil came off the boil af­ter data showed a sur­prise build in U.S. crude in­ven­to­ries. U.S. crude eased 42 cents to $53.64 a bar­rel, while Brent was last quoted down 16 cents at $55.93.

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