Asian Stocks Dip After U.S. Record Ahead of FOMC: Markets Wrap

(Bloomberg) -- Asian stocks slipped in early trading Tuesday as traders considered the mounting risks to growth in the region from spiking Covid-19 cases, and the implications of a broadening antitrust crackdown in China.

Indexes opened in the red in Hong Kong and China. Japan underperformed ahead of the Bank of Japan’s policy statement, with the latest state of emergency and associated restrictions on activity posing deeper risks to the economy. U.S. contracts edged higher after solid corporate earnings helped the S&P 500 Index notch another record.

Chinese regulators are now investigating food-delivery giant Meituan for suspected monopolistic practices, an extension of the campaign to rein in the country’s tech behemoths, which saw Alibaba Group Holding Ltd. hit with a record fine this month.

The U.S. 10-year Treasury yield held well below last month’s peaks, and the dollar gained slightly. Oil steadied as traders consider the risks to demand from India after the nation reported a million new coronavirus cases in three days.

While emerging economies from India to Brazil are grappling with a Covid-19 surge or renewed curbs, the developed world is on a firmer recovery path with a faster pace of vaccinations. U.S. data this week are expected to show growth accelerated to an annualized 6.8% in the first quarter, and robust consumer demand. These reports aren’t shifting the central bank’s highly accommodative stance, with the Fed expected to keep rates on hold and asset purchases unchanged at this week’s meeting.

“I am a bull,” Hilary Kramer, chief investment officer at Kramer Capital Research, said on Bloomberg TV. The Fed Chairman “is going to make sure he keeps rates low, he’s going to lag behind rather than trying to get ahead of inflation.”

More than three-quarters of the S&P 500 companies that have reported results so far have beaten analysts’ estimates, according to data compiled by Bloomberg. Amazon Inc., Facebook Inc. and Apple Inc. are due to report this week.

Elsewhere, copper extended a rally that has taken prices to the highest in almost a decade, as traders factor in the U.S. administration’s plans for a large infrastructure package.

Here are some key events to watch this week:

• Bloomberg Live hosts the Bloomberg Green Summit Monday through April 27
• Bank of Japan rate decision and Governor Haruhiko Kuroda briefing Tuesday
• Fed Chair Jerome Powell holds a press conference Wednesday following the Fed meeting
• Joe Biden makes his first address as president to a joint session of Congress Wednesday
• U.S. GDP is forecast to show growth strengthened in the first quarter, bolstered by government stimulus Thursday

These are some of the main moves in markets:

Stocks

• S&P 500 futures were up less than 0.1% as of 10:32 a.m. in Tokyo. The index rose 0.2%
• Japan’s Topix Index was down 0.4%
• Shanghai Composite Index was flat
• Hang Seng Index fell 0.2%
• South Korea’s Kospi Index was 0.1% lower
• Australia’s S&P/ASX 200 Index was down 0.5%

Currencies

• The yen was at 108.28 per dollar, down 0.2%
• The offshore yuan was at 6.4809 per dollar
• The Bloomberg Dollar Spot Index was up 0.1%
• The euro was 0.1% lower at $1.2070

Bonds

• The yield on 10-year Treasuries was steady at 1.57%
• Australia’s 10-year yield was one basis point lower at 1.74%

Commodities

• West Texas Intermediate crude was at $62.12 a barrel
• Gold was down 0.2% at $1,777.84 an ounce

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