Asia-Pacific stocks fell sharply after a day of wild swings on Wall Street, where stocks pulled back from losses as the chief of the US central bank announced no immediate plans to change the extremely lenient monetary policy.
Tokyo’s Topix index fell 1.2 percent as trading resumed after Tuesday’s holiday in Japan, while the Australian S & P / ASX 200 fell 1 percent and the Chinese CSI 300 of Shanghai and Shenzhen-listed stocks 2. 1 percent lost.
Hong Kong’s benchmark Hang Seng fell 2 percent as shares in Hong Kong Exchanges and Clearing, the city’s exchange operator, fell by a whopping 9.3 percent after local media reported that the area would increase its stamp duty on stock trading. The article was later removed, but HKEX shares closed the morning session by more than 5 percent.
In currency, the pound sterling rose 0.3 percent against the dollar to $ 1.4157 after reports that Rishi Sunak, the British chancellor, could extend stamp duty for real estate transactions for another three months. The UK currency is trading at its highest level since April 2018.
Overnight in the US, the benchmark S&P 500 and the technology-focused Nasdaq Composite fell 1.8 and 3.9 percent, respectively, before making up for the losses following comments from Federal Reserve Chairman Jay Powell. The S&P 500 ended the session at 0.1 percent and the Nasdaq at 0.5 percent.
Powell told the Senate banking committee on Tuesday that the Fed intended to continue to provide heavy support for the pandemic-ravaged US economy.
“In recent weeks, the number of new cases and hospitalizations has fallen, and ongoing vaccinations offer hope for a return to more normal conditions later this year,” he said. “However, the economic recovery remains uneven and far from complete, and the road ahead is highly uncertain.”
Stock futures for the S&P 500 and FTSE 100 in London were respectively 0.2 and 0.3 percent lower in Asian trading on Wednesday.
Treasury markets were uneventful, with a stable 10-year yield on US Treasuries of 1.35 percent. The 10-year yield is up 0.4 percentage points this year as rising inflation expectations have sparked concerns that the Fed could hike rates earlier than expected. Yields rise when bond prices fall.
Oil prices fell 0.5 percent with Brent oil, the international benchmark, to $ 65.03 a barrel. West Texas Intermediate, the US marker, fell 0.9 percent to $ 61.13 a barrel.