Asia stocks waver, expectations of Fed pause intact after data
By Julie Zhu
HONG KONG (Reuters) — Asian stock markets struggled for momentum on Thursday, after heavy gains this week, as expectations for a pause in Fed policy tightening remained intact despite U.S. data pointing to strength in parts of the economy.
U.S. economic data this week has left investors in the same state of confusion about Fed policy as they have been in for weeks. Retail sales proved strong while producer prices inflation, coming soon after the below-forecast core inflation, reinforced the disinflation theme and supported views of a peak in U.S. rates.
«With inflation, labour market and retail sales data now published for this month, and expectations for an FOMC hike in December and January priced at zero, a huge amount of information has been digested by markets in a very short time,» analysts at ANZ said in a note.
«A period of consolidation seems warranted, especially if Fed officials push back against the recent easing in financial conditions.»
Early in the Asian trading day, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2%. The index is up 7.1% so far this month.
Australian shares were down 0.33%, while Japan's Nikkei stock index slid 0.36%.
The MSCI Asia ex-Japan index, MSCI Emerging Market index and Nikkei all posted their biggest gains in a year, of 2.5% or more, on Wednesday.
Chinese industrial and retail numbers calmed nerves and lifted mainland stocks on Wednesday, with both data beating expectations in October even as the underlying economic picture highlighted significant pockets of weakness with the crisis-hit property sector continuing to forestall a full-blown revival.
China's blue-chip CSI300 index was 0.1% lower in early trade. Hong Kong's Hang Seng index dropped
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