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Tokyo - Asian stocks started March on a weak footing after US shares tumbled in afternoon trading on Wednesday.
Treasuries and the dollar held gains as traders awaited a second appearance from Federal Reserve Chairman Jerome Powell, whose comments riled markets earlier this week.
Shares in Japan and Australia fell with materials and industrials stocks faring worst. Hong Kong and Chinese shares outperformed after the Caixin manufacturing gauge came in above expectations.
Futures on the S&P 500 Index drifted after the US measure closed out its worst month in two years.
The 10-year Treasury yield held just below 2.9%. Crude was steady after plunging on an unexpectedly strong rise in inventories. The Australian dollar declined and bonds rose after business investment unexpectedly fell in the final three months of last year, with forecast spending also lower than expected.
"February finally cracked the volatility genie out of the bottle, and now the big question is: will he stay out for good?” Ryan Detrick, senior market strategist at LPL Financial, wrote in a note to clients on Wednesday.
"The good news is that March kicks off two of the strongest months historically for equities, before we hit a period of seasonal weakness from May through October."
Equities continued to fall one day after major indexes dropped based on a generally upbeat assessment of the US economy from Powell. His comments left investors wondering if the central bank planned more interest rate hikes than expected in 2018.
Powell testifies before the Senate Banking Committee on Thursday.
Elsewhere, the UK pound extended a decline and the nation’s bonds rose after the European Union published a draft Brexit treaty, with Prime Minister Theresa May squaring off for a fight. Bitcoin fell toward $10 000.
Here are some key events scheduled for this week:
Fed’s Powell testifies before the Senate Banking Committee on Thursday. Other Fed speakers this week are Bill Dudley. In the euro region, investors will be watching manufacturing and jobs numbers on Thursday.
UK Prime Minister Theresa May delivers a speech Friday on Britain’s relationship with the European Union. South Korea’s markets are closed on Thursday for a holiday.
These are the main moves in markets:
Stocks
The MSCI Asia Pacific Index fell 0.8% as of 1:19pm Tokyo time. Topix index dipped 1.5%. Hong Kong’s Hang Seng Index rose 0.2%. Australia’s S&P/ASX 200 Index declined 0.8%. Futures on the S&P 500 Index fell 0.2%.
Currencies
The Bloomberg Dollar Spot Index rose 0.1%. The Japanese yen fell 0.1% to 106.76 per dollar. The euro fell less than 0.05% to $1.2193. The Australian dollar fell 0.4% to 77.28 US cents.
Bonds
The yield on 10-year Treasuries rose less than one basis point to 2.86%. Japan’s 10-year yield declined one basis point to 0.044%. Australia’s 10-year yield fell five basis points to 2.758%.
Commodities
West Texas Intermediate crude rose 0.1% to $61.71 a barrel. Gold fell 0.2% to $1 315.53 an ounce. LME copper advanced 0.3% to $6 952.00 per metric tonne.
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