Asia Stocks to Track U.S. Slide on Fed Taper Talk: Markets Wrap

(Bloomberg) -- Asian stocks are set to dip at the open Thursday after a slide on Wall Street sparked by Federal Reserve minutes indicating officials could start paring stimulus from later this year. 

Futures were lower in Japan and Australia but steady in Hong Kong. U.S. contracts fluctuated after the S&P 500 and Nasdaq 100 fell for a second day. Most Fed officials agreed last month they could start slowing the pace of bond purchases later this year given the progress made toward inflation and employment goals. 

Treasuries and the dollar were little changed. Crude oil in New York dropped to the lowest since May after a surprise increase in U.S. gasoline inventories and amid ongoing concerns about the impact of delta variant on demand.

In China, Tencent Holdings Ltd. reported its slowest pace of quarterly revenue growth since early 2019 and warned investors to brace for more regulatory curbs. Separately, government-backed investors will recapitalize China Huarong Asset Management Co., ending months of speculation over whether Beijing would deem the troubled financial giant too big to fail.

The global equity rally has paused as investors take stock of the likely timeline for a reduction in the Fed’s massive bond purchases as well as the challenges for economic reopening from the fast-spreading delta variant. The Jackson Hole symposium next week, the U.S. central bank’s most prominent annual conference, may provide further clues on the stimulus outlook.

“It’s clear from the minutes that the Fed isn’t ready to start tapering yet, but they are leaning towards making an announcement by the end of the year at the latest,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

Elsewhere, Robinhood Markets Inc. warned that a revenue surge fueled by a boom in cryptocurrency trading might not last. Its shares sank in extended trading. Bitcoin traded below $45,000.

In the latest coronavirus developments, President Joe Biden beefed up the U.S. response to the delta strain, laying out a series of actions including vaccination boosters.

For more market analysis read our MLIV blog.

Here are some events to watch this week:

• Bank Indonesia rate decision and Governor Perry Warjiyo briefing Thursday
• U.S. initial jobless claims, leading index Thursday

Some of the main moves in markets:

Stocks

• S&P 500 contracts dropped 0.1% as of 7:05 a.m. on Tokyo. The S&P 500 fell 1.1%
• Nasdaq 100 futures were steady. The Nasdaq 100 fell 1%
• Nikkei 225 futures fell 0.8%
• Australia’s S&P/ASX 200 Index futures lost 0.7%
• Hang Seng Index futures rose 0.2% earlier

Currencies

• The Japanese yen was at 109.79 per dollar
• The offshore yuan traded at 6.4860 per dollar
• The Bloomberg Dollar Spot Index was little changed
• The euro was steady at $1.1710

Bonds

• The yield on 10-year Treasuries was little changed at 1.26%

Commodities

• West Texas Intermediate crude fell 1.3% to $65.59 a barrel
• Gold was flat at $1,787.55 an ounce

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