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Asian stocks fall to six-week lows as bond rout intensifies

14 September 2016 15:58

BAKU. KAZINFORM Asian stocks fell to fresh six-week lows on Wednesday and the greenback stood strong against a broad swathe of currencies including the Japanese yen as concerns grew about the fading impact of the world's major central banks to stimulate growth, Reuters reported.Losses in stock markets across Asia deepened as rising bond yields and soaring volatility forced investors to unwind positions.

The MSCI's broadest index of Asia-Pacific shares outside Japan slid 0.2 percent, extending its decline since late last week to 4.2 percent.

Within the region, Japan's Nikkei led losers with a 0.3 percent decline as uncertainty grew ahead of a central bank policy meeting next week.

The BOJ plans to make its controversial negative interest rate policy the centerpiece of future monetary easing, promising to weigh further rate cuts as expansions to asset buying near their limits, the Nikkei newspaper reported on Wednesday.

"The moves in developed market fixed-income, which are largely behind the volatility, have stemmed from Japan and the potential changes in monetary policy," said Chris Weston, chief markets strategist at IG Markets.

"Secondly, some of the biggest systematic funds have had to alter their portfolios. The rest of the market participants have had to simply react."

Stock markets have come under pressure as investors cut positions after large inflows in recent weeks betting on a long period of low volatility and suppressed bond yields.

Inflows into emerging market equity funds amounted to $24 billion dollars over the past 10 weeks, the highest on record according to Bank of America Merrill Lynch flow data. An index of market volatility soared to its highest level in three months.

On Wall Street, S&P 500 Index lost 1.48 percent to 2,127.02, a two-month low. Although it has managed to hold above its 200-day moving average at 2,121, a break of that level could sap market confidence. Futures were flat.

Source: Trend

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