Stocks Slip; Rupee in Focus on India-Pakistan Rift: Markets Wrap

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Published: February 26, 2019 8:53:57 AM

Asian stocks slipped with U.S. futures on Tuesday as the rush of optimism on U.S.-China trade talks from early Monday faded. India’s rupee will be in focus after Pakistan accused Indian fighter aircraft of violating its airspace.

Stocks Slip; Rupee in Focus on India-Pakistan Rift: Markets Wrap (Representational image)Stocks Slip; Rupee in Focus on India-Pakistan Rift: Markets Wrap (Representational image)

Asian stocks slipped with U.S. futures on Tuesday as the rush of optimism on U.S.-China trade talks from early Monday faded. India’s rupee will be in focus after Pakistan accused Indian fighter aircraft of violating its airspace.

Equities fell in Japan, Hong Kong and Australia. Chinese shares saw a retreat after mammoth gains yesterday; the country’s securities regulator issued a statement advising on margin financing late Monday. The yen edged up, and Treasury yields dipped. S&P 500 Index futures fell after the gauge closed at the highest in almost four months Monday. While U.S. President Donald Trump raised the possibility of signing a new trade deal with Chinese counterpart Xi Jinping, he also said Monday an agreement “might not happen at all.”

Oil held losses after tumbling the most in four weeks on Trump’s criticism that prices are too high.Traders will be looking for any signs that the progress on trade is enough to build on a global rally in equities that has been tested by slowing economic growth. Also in focus this week will be a hearing from Federal Reserve Chairman Jerome Powell, where investors will get the latest read on monetary policy and discussion of the central bank’s balance sheet.

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“The emerging shape and tone of the negotiations do not portend a resolution of many pending issues per se,” Aninda Mitra, senior sovereign analyst at BNY Mellon Investment Management in Singapore, said in a note. “Notwithstanding the relief in Chinese markets and an expected improvement in global risk sentiment, the bilateral trade relationship will remain complicated.”

The pound climbed as Prime Minister Theresa May is considering a plan to delay Brexit and stop the U.K. leaving the European Union with no deal next month, according to people familiar with the situation.

Here are some key events coming up:

Federal Reserve Chairman Jerome Powell delivers semiannual testimony on monetary policy and the state of the economy over two days to House and Senate committees. U.K. Prime Minister Theresa May updates the House of Commons on Brexit talks as the March 29 deadline nears for Britain to leave the EU. Lawmakers will vote on Feb. 27. President Donald Trump and North Korea leader Kim Jong Un are expected to meet for a second summit beginning on Tuesday. Thursday brings fourth quarter U.S. GDP.
These are the main moves in markets:

Stocks
The MSCI Asia Pacific fell 0.4 percent as of 11:52 a.m. Tokyo time. The Topix index fell 0.3 percent. Australia’s S&P/ASX 200 Index fell 1.3 percent Hong Kong’s Hang Seng Index dropped 0.6 percent. The Shanghai Composite Index fell 0.3 percent. S&P 500 futures fell 0.4 percent. The S&P 500 Index rose 0.1 percent Monday.

Currencies
The yen rose 0.3 percent to 110.78 per dollar. The offshore yuan fell 0.1 percent to 6.6887 per dollar. The euro was little changed at $1.1363. The British pound strengthened 0.3 percent to $1.3136.

Bonds
The yield on 10-year Treasuries fell about one basis point to 2.65 percent. Australia’s 10-year bond yield rose one basis point to 2.09 percent.

Commodities
West Texas Intermediate oil fell 0.4 percent to $55.19 a barrel. It slid 3.1 percent in the previous session. Gold was at $1,329.42 an ounce.

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