Asian stocks weaken due to stimulus concerns, dollar holds steady By Reuters

By Alwyn Scott and Anshuman Daga

NEW YORK / SINGAPORE (Reuters) – Asian equities fell on Tuesday, retreating from record levels as lingering concerns about possible obstacles to the Biden government’s $ 1.9 trillion stimulus weighed on mood, pulling income from the US Treasury for three-week lows.

The lower risk appetite gave the dollar some support against a basket of currencies, while oil prices fell.

In a sea of ​​red seen in Asian markets, South Korea and Hong Kong overcame losers and fell 1.7% each, Japan fell 0.6% and Chinese shares fell 1.5%. All have reached historical records this month.

MSCI’s broader Asia-Pacific stock index outside Japan fell 0.7% to 722.7, but it was not far from a record set on Monday and is still up 9% so far this year.

Australian stock markets were closed due to the national holiday.

E-mini futures were down 0.26%.

All eyes were on Washington as US lawmakers agreed that providing COVID-19 vaccines to Americans should be a priority, even when they opposed the size of the pandemic relief package.

“The immediate question now is when will stimulus aid be approved and how much?” said Christopher Grisanti, chief share strategist at MAI Capital Management.

The financial markets are eyeing a huge package, although the differences have meant months of indecision in a country that suffers more than 175,000 cases of COVID-19 a day with millions of unemployed.

The fourth quarter’s gross domestic product data for the United States, Germany and France, released this week, could cool the mood.

During the night, the index climbed to a new peak and added 0.7% in the hope of strong gains later this week from tech titans, but the index struggled to keep pace and fell 0.12%. ()

European equities closed at two-week lows, with the decline in German business morale underscoring the damage from COVID-19’s stricter restrictions. ()

US lawmakers are expected to keep the money tap open when the Federal Reserve’s Open Market Committee meets on Tuesday and Wednesday.

“We hope that the January FOMC will repeat and reinforce the Fed’s existing dovishness, which is still significant given recent central bank reduction discussions and other considerations to adapt the policy,” said Ebrahim Rahbari, foreign exchange strategist at CitiFX, in a report.

“The Dovish Fed policy is a key factor in our view of a rise in risky assets and a view of a bearish USD. Therefore, we continue to closely observe the Fed’s speech and possible policy changes,” he said.

The dollar advanced to a nearly one-week high against a basket of currencies, as volatility in equity markets around the world undermined investors’ appetite for riskier currencies.

The euro fell slightly overnight to $ 1.2142 and remained around those levels in Asian trade.

The 10-year reference US Treasury yields remained where they left off in New York at 1.0414%, having reached a three-week low of 1.0300% overnight. [US/]

fell 0.2% to $ 55.75, having risen almost 1% on Monday. [O/R]