Stocks Decline As Growth Risks Weaken Confidence; Demand For Bonds, Dollar.

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Asian stocks lost ground, retreating from over three-week highs as worries about a global economic downturn sapped investors’ risk appetite.

Bond yields eased amid bets that a U.S. recession would slow the Federal Reserve’s aggressive tightening campaign. At the same time, the dollar built on its recovery from a 2 1/2-week low against major peers, supported by demand for the U.S. currency as a safe haven. Risk markets are obviously priced for some kind of slowdown, but are they priced for an outright recession? I would argue no,” said Ray Attrill, head of currency strategy at National Australia Bank.

Japan’s Nikkei (.N225) retreated 0.75%, while Chinese blue chips (.CSI300) eased 0.13%. Hong Kong’s Hang Seng (.HSI) slid 0.45%, with its tech index (.HSTECH) tumbling 1.51%. MSCI’s broadest index of Asia-Pacific shares (.MIAP00000PUS) lost 0.62% to 158.68, after touching the highest since June 29 at 160.03.
U.S. S&P 500 emini futures slipped 0.09%, pointing to an extension of the benchmark’s (.SPX) 0.93% slump, when a survey showed business activity contracting for the first time in nearly two years amid persistently heated inflation and rapidly rising interest rates.

Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple (AAPL.O) and Microsoft (MSFT.O), among others. The dollar index – which measures the safe-haven currency against six major peers – edged 0.1% higher to 106.81, climbing further from a 2 1/2-week low of 106.10 reached.

The greenback added 0.29% to 136.485 yen , while the euro slipped 0.24% to $1.01875. The 10-year U.S. Treasury yield was little changed at 2.79% after sliding from as high as 3.083% over the previous two sessions. In commodities, Brent crude added 0.15%, or 15 U.S. cents, to $103.35 per barrel. Nymex light crude was slightly higher at $94.75.
Reuters.

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