Asia Stocks Fall After Rally, Aussie Dollar Drops: Markets Wrap

Asian equity markets slipped from a two-year high in the absence of catalysts to spur further gains, while the Australian dollar slumped.

Investors are stepping back after a rally on Monday sent South Korean equities to a record and Japan’s Topix to the highest since December 2015. Chinese stocks extended a selloff that has erased more than $500 billion from equity values amid a crackdown on financial leverage. The Aussie fell to the lowest level since January after disappointing retail sales data.

Stocks are trading at record levels amid optimism over the global economy. Volatility is declining to multi-year lows.

Investors will be parsing comments from Federal Reserve Bank of Minneapolis President Neel Kashkari later Tuesday for any clues on U.S. central bank policy.

Key events coming up this week:

Earnings continue to be released with Walt Disney Co., Mitsubishi Corp., Toyota Motor Corp. and Deutsche Telekom AG among those notable.

Voting is under way in South Korea to elect a new president following the ouster of Park Geun-hye in a corruption scandal.

Here are the main moves in markets:

Stocks

The MSCI Asia Pacific Index fell 0.5 percent as of 3:07 p.m. in Tokyo. The gauge closed Monday at the highest level since June 2015.

Japan’s Topix index fell 0.3 percent after jumping 2.3 percent in the previous session, its biggest one-day gain since January.

The Shanghai Composite Index dropped 0.1 percent after a selloff brought the gauge to the lowest level since October.

Hong Kong’s Hang Seng rose 0.5 percent.

Australia’s S&P/ASX 200 Index dropped 0.6 percent.

The VIX index, a gauge of volatility in the U.S. equity market, tumbled to the lowest level since 1993 after the elections in France.

Currencies

The Australian dollar dropped 0.5 percent to the lowest since Jan. 10.

The Bloomberg Dollar Spot Index rose 0.1 percent

The yen slipped 0.1 percent to 113.34 per dollar.

The euro traded at $1.0925, little changed. The currency fell 0.7 percent Monday following Macron’s victory as France’s next president.

Commodities

Gold gained 0.1 percent to $1,226.97.

Oil slipped 0.2 percent to $46.36 a barrel.

Source: Bloomberg

Junior Trader Stefan Panteleev

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