Asian stock drops to two weeks low as hopes affect the rate of diet, high tech stocks attract

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TOKYO / HONG KONG (Reuters) – Asian stocks dropped to the lowest levels in two and a half weeks on Tuesday as the US Federal Reserve cut interest rates at the end of the month, and pulled down Lower technology companies at Apple Inc. overnight downturn.

PHYSICAL FILE: Passerbys goes over an electric screen displaying Asian market indexes outside of brokering in Tokyo, Japan, 1 July, 2019. REUTERS / Issei Kato

Investors have invested to return the cut expectations of the feed rate after strong unexpected gains in US jobs for June, with US stock markets falling on the second straight day.

The broadest index of Asia-Pacific shares outside Japan fell by 0.5% to the lowest rate since 20 June.

Japan's Nikkei slipped 0.1%.

In China, Shanghai Composite CSI300 and the blue chip were 0.6% lower, and Hang Hong Hong Hong 0.8% fell.

Australian stocks fell by 0.4% and the Korean market was 0.3% lower.

On Wall Street, the S&P 500 lost 0.48% and the Nasdaq Composite fell 0.78%, led a fall in Apple after the brokerage downgraded the stock to “sell”.

Apple suppliers fell in Japan, as Murata Manufacturing and Taiyo Yuden, 2.1% to 3.4%. In the Greater China Area, suppliers from the Hon Hai to AAC Tech lost between 1.3% and 2.8%.

Money market futures <0#FF:> they are still fully pricing in a 25 point (bps) cut-off point at the next policy meeting at the FED on 30-31 July, but have made a reduction of almost 50 bps.

“Headline payroll figures were very strong, but salaries were very tight, and overall 25 basis points would be justified as an anticipatory act and I think the current market price is fair,” said Naoya Oshikubo, senior economist at Sumitomo Mitsui Trust Asset Management.

Global equity is likely to remain under pressure after success over the last month, Pictet Wealth Management said in Tuesday's memo.

“Following a strong recess in June that more than the abolition of the drawdown took place in May, the evaluation is looking forward to the valuation,” the company said. “We look forward to an equity (emerging market) being set aside in the coming weeks, but with the possibility of rotation of quality cycles.”

Investors focus is shifting to Fed Chair evidence Jerome Powell before the Congress later this week for tips on monetary policy.

“What the market will be looking for is whether the language is so invisible (previously at the last policy meeting),” said Christy Tan, head of Asia's market strategy at National Australia Bank. “There is too much incredible amount needed for the diet to be made in the market.”

DOLLAR STRENGTH

In the currency market, elimination of dietary cut expectations helped with the dollar. (FRX /)

The euro traded at $ 1.1213, near a low $ 1.1207 on Monday, its weakest level since 19 June.

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The dollar index was not compared to a basket of six major currencies at 97.374.

The British pound stood at 1.2508, which was not far from six months of $ 1.2481 lows touched Friday.

Oil prices were somewhat softer as to whether growth in global economic growth would drive oil demand forward, leading to tensions on Iran's nuclear program.

Brent futures tires fell 0.4% to $ 63.87 barrels. U. SA. Western futures-Western Texas Texas (WTI) are falling 0.42% to $ 57.42.

Additional reporting by Donny Kwok in HONG KONG; Edited by Shri Navaratnam & Kim Coghill

Our Standards:The principles of Thomson Reuters Trust.

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