Asian stocks point to mixed start; US Treasuries rise

A pedestrian walks past quotation boards flashing the key Nikkei index of the Tokyo Stock Exchange in Tokyo. (AFP pic)

Asian stocks looked set for a mixed start to trading Wednesday following a volatile session for US equities and as yields on Treasuries retreated from a seven-year peak.

Equity futures nudged higher in Japan and Hong Kong, while Australian shares pointed to small declines. The S&P 500 Index was dragged down by materials shares, after a profit warning in the sector, while technology shares rebounded from a three-day rout.

The Bloomberg Dollar Spot Index hit lows on the day after US President Donald Trump said the Federal Reserve is moving too fast with rate hikes.

The sell-off in Treasuries showed some signs of stabilising as the yield on the 10-year benchmark edged down to 3.21%.

Italian bonds recovered as Finance Minister Giovanni Tria appealed for calm amid a war of words between the government and European Union authorities over Rome’s spending program for the coming year.

Asian investors are assessing increasingly attractive valuations against a backdrop of deepening US-China tensions and a surge in volatility for stock and bond markets.

Bear markets for equities in China and Hong Kong contrast with American equities that remain near to all-time highs. China’s yuan remains weak after steps this week from authorities to spur lending in the economy.

New lending and money-supply data, due as soon as today, will be closely watched as Beijing strives to support flagging growth.

Elsewhere, crude advanced as Hurricane Michael curtailed offshore oil production and the IEA issued a warning to the global market.

Zinc and nickel climbed, while aluminium edged lower and gold stabilised after dropping the most in almost two months.