HONG KONG – Asia stocks dropped on Tuesday and European equity futures fell as a senior Chinese official expressed wariness about the risk of asset bubbles in foreign markets and a recent bond market sell-off still weighed on investor sentiment.
European markets appeared set for a lower open with Euro Stoxx 50 futures down 0.38% and London’s FTSE dropping 0.4%. Those of Germany’s DAX fell 0.49%.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.33%, giving up early gains. Japan’s Nikkei was down 0.85% as some investors booked profits on defensive energy and utility shares before the end of the fiscal year this month.
Australian shares ended marginally lower on Tuesday as the market appeared to show a muted response towards the central bank’s decision to stand pat on interest rates, as expected.
The S&P/ASX 200 index fell 0.4% to 6,762.3 at the close of trade, having risen as much as 1% during the session.
Shares in mainland China and Hong Kong reversed course to trade lower in the afternoon session after a top regulatory official expressed concerns about the risk of bubbles bursting in foreign markets, and said Beijing is studying effective measures to manage capital inflows to prevent turbulence in the domestic market.
“Financial markets are trading at high levels in Europe, the U.S. and other developed countries, which runs counter to the real economy,” Guo Shuqing, head of the China Banking and Insurance Regulatory Commission, told a news conference.
(Source: International Agencies)
