A housing policy briefing in China left investors unimpressed, sending property stocks lower, and Asian equities plunging to three-week lows on Thursday. Meanwhile, the euro hit an 11-week low ahead of an anticipated rate drop by the European Central Bank.
After early gains retreated, China's broad indices lost direction while Japan's Nikkei fell 0.7%. The 33-month high set last week is currently trading more than 10% below the Shanghai Composite, which increased by 0.1%.
Two days of advances in CSI300 real estate stocks were reversed with a 7% drop. Although the Hang Seng in Hong Kong is now up 0.5%, it is still 12% behind its previous top as investors pull out in anticipation of further government expenditure in China and indications that it is boosting the country's economy.
The housing minister of China pledged to facilitate the financing of builders' thousands of completed projects.
However, there was no fresh move to pique investors' interest in a significant rebound for an industry where a crackdown on developers' financing has sparked a wave of defaults and falling prices have eroded household confidence in the asset class.
As mining stocks declined and iron ore prices in Singapore dropped, Australian equities also depreciated from their all-time high. Following Wednesday's closing of the major indexes at or near record highs, U.S. equity futures plummeted down.
Since statistics on Wednesday revealed an unexpectedly a substantial decline in British inflation, bonds have been supported. Gold, which pays no interest, has increased to almost a new high, while sterling has fallen below $1.30.
At Wednesday's two-month low, gold was trading at $2,680 an ounce and sterling at $1.2985. In Asia, benchmark 10-year U.S. rates were stable at 4.03%, while two-year yields remained stable at 3.95%.
Other foreign exchange markets, on the other hand, have seen an increase in the dollar as a result of Republican Donald Trump's improving prospects in U.S. presidential prediction markets.
Trump's immigration, tariff, and tax policies are perceived as inflationary, which is good news for the currency and bad news for bonds.
(Sources: investing.com, reuters.com)
