Asian stocks, oil on track for first weekly loss this year
A man wearing a protective mask in front of a coronaviruses outbreak, standing in front of an electric board showing Nikkei index outside a brokerage in Tokyo, stands in front of a man wearing a protective mask, amid the coronaviruses disease COVID - 19 outbreak.
SINGAPORE Reuters -- Asian share markets and U.S. futures fell on Friday after U.S. stocks took a knock overnight, hurt by concerns over the Federal Reserve's tightening and weaker than expected economic and earnings data.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.8%, while Japan's Nikkei slid 1.66%. Oil prices fell sharply and were on track for their first weekly loss this year.
Rob Carnell, chief economist at ING in Singapore, said yesterday that the selloff of U.S. stocks was brutal and will dominate Asia this morning.
He said there were pockets of optimism like China's more accommodating moves on monetary policy.
The Nasdaq dropped to close 1.3% lower late in the U.S. session, as investors anxiously await the Fed's policy meeting next week to figure out how it intends to tackle inflation.
After posting its best day in six months the Hong Kong benchmark fell 0.24% and Chinese blue chips lost 0.5% as a result of gains the day before, the moves extended to Chinese shares.
China cut its benchmark mortgage rates on Thursday, the latest move in monetary easing aimed at propping up an economy that's troubled by the country's troubled property sector and worries over the Omicron variant of coronaviruses.
The main divergence in equity market performance between the U.S. and Greater China can be attributed to a bifurcation in monetary policies, said David Chao, global market strategist for Asia Pacific ex-Japan at Invesco.
Oil dropped asOPEC struggled to meet its production targets and the spectre of Russia invading Ukraine sent jitters through global markets.
Carnell said that getting product out to market is a major factor because demand remains firm as the world slowly reopens.
On Friday morning, U.S. crude fell 2.44% to $83.46 per barrel and Brent crude fell 2.55% to $86.14. O R U.S Treasury yields were slightly lower on Friday, having risen sharply earlier in the week as investors positioned themselves for the likelihood that the Federal Reserve will tighten its monetary policy in order to stave off inflation. The US yields on benchmark 10 year notes were last at 1.7791%, their lowest in a week, having hit a two-year high of 1.902% on Wednesday.
Rising yields had helped the dollar gain earlier in the week, but the dollar index was flat against a basket of six major currencies on Friday.
The greenback lost ground on the safe haven yen, falling to a one-week low of 113.8 per dollar, while the risk friendly Australian dollar AUD D 3 fell 0.39%.
Spot gold is mostly unchanged at $1,838. 41 an ounce.