Home Topics Business Asian stocks fall amid China's asset bubble warning

Asian stocks fall amid China’s asset bubble warning

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© Reuters. FILE PHOTO: FILE PHOTO: The HKEX mark can be seen at the China International Service Trade Fair in Beijing in 2020

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By Julie Zhu

HONG KONG (Reuters) – Asian stocks fell and European stock futures fell on Tuesday as a senior Chinese official voiced concern over the risk of asset bubbles in overseas markets and a recent bond sell-off still weighed on investor sentiment.

European markets appeared to be poised for a lower open, down 0.38% and down 0.4% in London. Those of fell 0.49%.

MSCI’s broadest index for stocks in the Asia-Pacific region outside of Japan fell 0.33%, giving up early gains. declined 0.85% as some investors posted gains on defensive energy and utility stocks before the end of the fiscal year.

Australian stocks ended Tuesday slightly lower as the market appeared to be showing a muted reaction to the central bank’s decision to hold interest rates as expected.

They fell 0.4% to 6,762.3 at the close of trading after rising up to 1% during the session.

Mainland China and Hong Kong stocks reversed to trade lower in the afternoon after a senior regulator raised concerns about the risk of bubbles bursting in overseas markets. Beijing is currently examining effective capital flow control measures to prevent turbulence in the domestic market.

“The financial markets in Europe, the US and other industrialized countries are trading at high levels, which goes against the real economy,” said Guo Shuqing, head of the Chinese banking and insurance regulator, at a press conference.

Chinese blue chips were down 1.78% while Hong Kong was down 1.45%.

Investors are now watching China’s annual parliamentary session beginning Friday, which is expected to set a course for economic recovery and come up with a five-year plan to avert stagnation.

US stocks rebounded overnight and had their best day in nearly nine months as bond markets calmed down after a month-long sell-off.

“Risk appetite returned to the markets as investors shook off concerns about higher interest rates and focused on the recent strength in manufacturing data,” ANZ analysts wrote in a research report.

US stocks were shaken last week when a government bond sell-off hit a one-year high of 1.614%. The 10 year return fell 1.4119% after the trade.

fell 1.93% to $ 48,669 after rising nearly 7% on Monday after last week’s bond out cooled down. Citi said the most popular cryptocurrency was at a “tipping point” and could become the currency of choice for international trade.

However, demand for riskier assets has not weighed on the dollar, usually considered a safe haven currency, as investors look to the US to see rapid growth and inflation. The 0.207% gain in afternoon trading versus a basket of currencies was 91.205, in sight of a three-week overnight high.

The Australian dollar fell 0.14% to $ 0.7758 after the RBA meeting.

A stronger greenback weighed on gold and the precious metal was on the defensive on Tuesday at $ 1,715.8400 an ounce.

The excess of risk assets did not help the energy markets. Oil prices fell more than 1% overnight after data showed that China’s factory activity growth fell to a nine-month low in February, partly due to disruption during the New Year holidays. There were also fears among energy investors that OPEC could increase global supply after meeting this week.

fell 1.35% to $ 62.83 a barrel while US West Texas Intermediate Crude Oil lost 1.34% to $ 59.83.

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