Asian stocks report modest declines, Shanghai Composite drops below 100-day MA
|- Asian stocks are tracking the US equities lower.
- Risk remains depressed on trade tensions.
Asian equity markets are flashing red this Thursday morning amid ongoing trade tensions and following the overnight losses on Wall Street.
Stocks in Australia and Japan are currently down 0.36% and 0.84%, respectively. The Shanghai Composite index is trading 1% lower on the day at 2,855. The index has breached the 50-day MA, currently at 2872, for the third time in 13 days.
In related markets, the Australian government bond yields fell to record lows earlier today, pushing the spread between the 10-year US and Australian government bond yields to a lifetime high of 80 basis points. The anti-risk Japanese Yen has picked up a haven bid. Gold, however, is again struggling to gain ground amid risk aversion.
The US equities slipped on Wednesday, dragging treasury yields lower after news hit the wires that US considered cutting off the flow of vital American technology to five Chinese companies.
Further, the odds for a rate cut fell following the release of the Fed minutes, possibly adding to the bearish tone around the equities. Fed officials judged that their patient approach to changes in interest rates would be appropriate “for some time" and the recent weakness in inflation was due to transitory factors, the minutes revealed.
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