U.S. markets hold onto gains despite Fed's hawkish remarks


HONG KONG, Aug 5 - Analyst shares held onto the gains this week on Thursday, despite hawkish remarks from a senior official at the Federal Reserve that boosted the dollar while weighing on risk appetite.

Uncertainty about Chinese policy made investors hesitant.

Futures pointed to similar caution in European equity markets. The FTSE futures edged up 0.08% in the pan-region and the Euro Stoxx 50 futures edged 0.02% higher.

The broadest index of Asia Pacific shares outside Japan was down 0.16%, with tiny declines in Hong Kong down 0.11% and Korea down 0.16%, balanced by a gain of 0.24% in Australian shares that are heading towards a record close

This week the MSCI Asian regional benchmark has recovered most of the ground lost a week earlier when a series of Chinese regulatory crackdowns on sectors from property to education overshadowed Chinese stocks and swamped the region as a whole.

In its second week, Chinese equities have been consistently quieter in general. The Chinese Blue Chip Index was last down 0.2%, weighed primarily by investors dumping online gaming firms, fertilizer producers and e-cigarette makers fearing criticism of these industries in state media could portend more government crackdowns.

In the short term, the further rebound may continue but uncertainties over policy control will drive long-term investors away from Chinese technology names said Edison Pun, senior market analyst at Saxo Markets.

U.S. stock futures ( the S&P 500 e-minis - rose 0.18%) in Asian trading.

United States stocks closed mainly lower on Wednesday, with the S&P 500 losing 0.46% from a record high. The blue chip Dow slid 0.92%, though the tech heavy Nasdaq eked out small gains with investors there attaching greater weight to negative data from the services sector than to positive jobs figures.

Markets are looking at mixed signals from the data and trying to assess what the Fed will do, said Kyle Rodda, an analyst at IG markets. Rodda said the latest moves were driven by hawkish speech from Fed Vice Chairman Richard Clarida, which took a longer tone but rodda is favorable.

Clarida, a major architect of the Fed's new policy strategy, said he felt the conditions for raising interest rates could be met by the end of 2022.

Those remarks helped the US dollar and the yields.

The benchmark 10 year yield was last at 1.192% from a $ 1.184% close, having reached 1.127% - its lowest level since February - earlier in the day.

This helped the dollar, which bought 109.63 yen, compared to a low of 108.71 on Wednesday.

Sterling was little changed against the dollar ahead of a Bank of England policy meeting.

Although the BoE was widely expected to leave policy interest rates unchanged, there is a risk that the BoE strikes a more hawkish tone because economic activity is improving and inflation has lifted sharply, wrote CBA analysts in a note.

The firmer dollar in turn weighed a little on gold with the spot price falling 0.1%.

Oil prices rose, supported by tensions in the Middle East and recovered a little ground after three straight days of declines driven partly by a surprise build up of crude stocks in the United States.

Brent crude rose 0.37% to $68.4 a barrel, while U.S. crude rose 0.41% to $70.59 per barrel.

Ether, the world's second largest cryptocurrency, dropped 0.64% after having gained 8.7% a day earlier over a technical adjustment to its underlying blockchain, which should happen later today.

Bitcoin slipped 0.8%, resting in the vicinity of $40,000 where it has been for the last week.