Asian shares extend global sell-off as rate hopes ebb
By Stella Qiu
SYDNEY (Reuters) -Asian shares extended a global sell-off on Wednesday, while the dollar held gains, as market optimism about early and aggressive U.S. interest rate cuts ebbed ahead of the release of Fed minutes and jobs data.
Europe is set to open lower, with EUROSTOXX 50 futures down 0.4% and FTSE futures off 0.3%. S&P 500 futures and Nasdaq futures were both down 0.1%.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.3% after a 1.0% drop on Tuesday in a sluggish start to 2024. The index rose 4.6% in 2023.
Japan markets are shut for a public holiday.
South Korean shares slid 2.1%, and Hong Kong's Hang Seng index fell 1.1%, as technology shares dropped 2.2% following a tech-led slide on Wall Street.
However, Chinese gaming stocks rose after Reuters reported that Beijing had removed a gaming regulatory official. The sector had suffered a sell-off in the wake of proposed rules to curb spending on video games.
Kyle Rodda, an analyst at Capital.com, said the combination of event risk and thin liquidity at the tail end of the holiday raises the prospect of exaggerated moves in markets and heightened volatility.
«All that's required is a catalyst, which could come from the data flow in the coming days,» Rodda said.
Later on Wednesday, U.S. Fed minutes for its December meeting and the ISM survey on U.S. manufacturing are due to be released. The closely watched U.S. nonfarm payrolls report is due on Friday.
Overnight, Wall Street's euphoria about the prospects for rate cuts cooled as stocks retreated from record highs. The CME FedWatch Tool suggests a 21.4% chance that U.S. rates will remain steady in March, up from 11.4% on Dec. 29.
The Nasdaq slid 1.6%, dragged lower by a nearly 3%
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