MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.6%
Asian shares are closing the week with a whimper after a recent rally to 26-month highs drew profit-taking, while the strength in the U.S. dollar pushed the Japanese yen towards the intervention zone.
Europe is set for a flat open, having jumped a day earlier as rate cuts there gathered pace. Both EUROSTOXX 50 futures and FTSE were little changed but S&P 500 futures added 0.1% and Nasdaq futures advanced 0.2%.
Overnight, the Swiss National Bank cut rates for a second time while the BoE opened the door to an easing in August after holding rates steady. Sterling, the Swiss franc and the euro dropped, lifting the dollar broadly.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.6% on Friday, dragged lower by a retreat in technology shares, tracking a mixed session on Wall Street overnight.
The index is set for a weekly gain of 0.9% after advancing to its highest since April 2022 on Wednesday as a recent run of soft U.S. data strengthened bets of two rate cuts from the Fed to come this year.
We are seeing more and more of these central banks either open the door or continue cutting rates and that is a really good thing, particularly as we are starting to see some softer data consistently come out of the U.S., according to Tony Sycamore, analyst at IG.
He added: But in the short term, I think we should look for more of these end-of-month, end-of-quarter flows. In the medium term, I think the market will continue to back those tech and AI winners.
Japan’s Nikkei dropped 0.1% and the yen remained jittery at 158.91, levels not seen since late April when the Japanese authorities intervened in the market to stem the currency’s fast declines.
Chinese stocks dropped marginally, with the Shanghai Composite index struggling to stay above a key level of 3,000 points. The index is down 0.1%, having slipped 5.6% since a recent multi-month high in late May.
Hong Kong’s Hang Seng index slid 1.7%, extending the weakness seen over the last month.
