Asian stocks brace for fall, China data eyed

SYDNEY Wed Jun 19, 2013 6:43pm EDT

1 of 8. A trader watches a screen on the floor at the New York Stock Exchange, June 10, 2013.

Credit: Reuters/Brendan McDermid

SYDNEY (Reuters) - Asian stock markets were braced for a fall on Thursday in line with Wall Street after the U.S. central bank confirmed that it would begin to withdraw stimulus this year if the economy continued to recover as it expected.

Tokyo's Nikkei futures in Chicago and Australia's share price index futures fell, pointing to weaker openings for two of Asia-Pacific's main markets, following a 1.4 percent slide in the U.S. S&P 500 index .SPX.

Traders said markets could come under even more pressure if a report on China's factory activity, due at 9.45 p.m. ET, provided fresh evidence of weakness in Asia's economic powerhouse.

"Given the market's growing fears over a hard landing for the Chinese economy, a particularly weak number could add to the post-FOMC selling pressure on the emerging currencies as well as the commodity bloc currencies," analysts at BNP Paribas wrote in a note.

On Wednesday, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS had ended flat with investors unsure of what Federal Reserve chief Ben Bernanke would say and how markets would react.

Dashing hopes for a more dovish stance, Bernanke said the U.S. economy was expanding strongly enough for the central bank to begin slowing the pace of its bond-buying stimulus later this year.

That sent U.S. stocks and bonds sharply lower, pushing benchmark Treasury yields to a 15-month high. In turn, the U.S. dollar rallied 0.9 percent against a basket of major currencies .DXY, posting its best one-day gain in over a month.

The euro slid around 0.8 percent to $1.3262, swiftly retreating from a four-month high around $1.3418.

Among the hardest hit were the Australian dollar, which has been sold not only as a commodity currency but also as a proxy for emerging markets. Emerging market currencies, from Indonesia to Thailand, are also expected to come under heavy pressure

The Australian dollar slumped more than 2 percent, breaking below $0.9300 for the first time since September 2010.

(Editing by John Mair)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
Gen.Swiss wrote:
feel investors have anxiety over fed decision. gonna watch the ship sink with oil as u.s. market watches a correction. should I remind people what a triple top is? oh and its going to be soon with u.s. recent announcement to get involved in yet another war. u.s. wants to back Syrian rebels, this isn’t a war against Syrian gov this a indirect war with Russia. How do I know its oil? well its a secret, there are other futures involved. Happy trading.

Jun 19, 2013 8:31am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.