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    Asian Stocks Drop as Rally Eases; Pound Holds Loss: Markets Wrap

    Stocks in Asia dropped Wednesday as the positive sentiment at the start of the week faded for lack of fresh data alleviating global growth concerns. The pound held losses as the U.K.’s Brexit woes deepened anew.

    Shares posted modest losses across the region and U.S. futures slipped. Earlier, the S&P 500 Index closed slightly higher. Treasuries and the dollar steadied after yields fell Tuesday in the wake of softer inflation data that bolstered bets the Federal Reserve will remain patient. Australia’s dollar dropped with bond yields after weak consumer confidence data reinforced a deteriorating outlook for the economy. The yen edged higher.

    “I expect equity markets to remain volatile and to tread water, and there is still too much risk in risk assets, and ultimately I think bond yields will head lower but this is a process that unfolds, it’s not a sudden event,” Suzanne Hutchins, a senior portfolio manager at Newton Investment Management in London, said in an interview at Bloomberg’s New York headquarters.

    Sterling is on the back foot again after U.K. lawmakers Tuesday rejected the government’s latest deal to leave the European Union, raising the prospect that the divorce will be delayed or even reversed. Parliament will now probably vote to postpone Brexit this week, and lawmakers -- including some of May’s own Cabinet -- will likely try to maneuver to force the government to rip up its Brexit plans and start again.

    Alongside Brexit developments, investors have a slew of economic data to digest. The latest inflation reading came amid falling prices for autos and prescription drugs, adding to evidence the American economy is in no danger of overheating. In the coming days the focus will turn to Chinese production and retail sales, as well as a Bank of Japan policy decision.

    Elsewhere, crude oil prices climbed after an industry report showed an unexpected drop in U.S. fuel supplies.

    Here are some of the key events coming up:

    • Chinese retail sales and industrial production data are scheduled for release this week. The National People’s Congress is set to wrap up on Friday.
    • Bank of Japan Governor Haruhiko Kuroda will speak on Friday, after he and his board meet to decide on monetary policy.

    And these are the main moves in markets:

    Stocks

    • The MSCI Asia Pacific Index fell 0.5 percent at 10:35 a.m. in Tokyo.
    • Japan’s Topix index slipped 0.7 percent.
    • Hong Kong’s Hang Seng Index fell 0.3 percent.
    • Australia’s S&P/ASX 200 Index fell 0.5 percent.
    • Shanghai Composite slipped 0.7 percent.
    • South Korea’s Kospi index declined 0.9 percent.
    • Futures on the S&P 500 Index fell 0.2 percent. The underlying gauge increased 0.3 percent Tuesday.

    Currencies

    • The yen rose 0.1 percent to 111.21 per dollar.
    • The offshore yuan fell 0.1 percent to 6.7121 per dollar.
    • The Australian dollar lost 0.3 percent to 70.63 U.S. cents.
    • The euro bought $1.1290, little changed.
    • The British pound rose 0.1 percent to $1.3086 after declining 0.6 percent.

    Bonds

    • The yield on 10-year Treasuries rose one basis point to 2.61 percent.
    • Australia’s 10-year bond yield dropped seven basis points to 1.96 percent, falling below 2 percent for the first time since 2016.

    Commodities

    • Gold rose 0.2 percent to $1,304.23 an ounce.
    • West Texas Intermediate crude gained 0.4 percent to $57.07 a barrel.

    Source Bloomberg

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