Asia shares ebb into the red as inflation, earnings loom large
By Wayne Cole
SYDNEY (Reuters) -Asian shares slipped into the red on Monday as Chinese stocks extended their recent retreat, and investors braced for U.S. inflation data and a corporate reporting season where robust results are needed to justify high valuations.
Geopolitical tensions were also on the radar as disruptions in the Red Sea raised shipping costs in Europe, while the Israeli conflict with Hamas threatened to spread to Lebanon.
There was more promising news from Washington where U.S. congressional leaders agreed on a $1.6 trillion spending deal aimed at averting a partial government shutdown.
Early gains were quickly erased and MSCI's broadest index of Asia-Pacific shares outside Japan lost another 0.84%, after retreating 2.5% last week.
Thailand's stocks and currency both fell after the country's prime minister said he would speak with the governor of the central bank about cutting rates.
Japan's Nikkei was closed for a holiday, but futures were trading at 33,400 compared to Friday's cash close of 33,377. The index has been underpinned by a drop in the yen as the dollar enjoyed a broad bounce.
Chinese blue chips lost 1.1% to near five-year lows, having slid almost 3% last week.
The sour mood spread to EUROSTOXX 50 futures which dipped 0.2%, as did FTSE futures. S&P 500 futures and Nasdaq futures were both down around 0.1%.
The S&P 500 lost 1.5% last week to break a nine-week winning stretch, which had been its longest since 1989. The index's 24% rally last year means valuations are looking a little stretched so much is riding on the results season.
Major banks including JPMorgan Chase (NYSE:JPM) and Citigroup start the reporting rush on Friday with hopes high for upbeat profits. [RESF/US]
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