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Asian shares step back from 2-wk highs, dollar firm

Berita 24 English -  Asian stocks fell from two-week highs on Thursday, and China got off to a shaky start on fears central banks were getti...

Berita 24 English - 
Asian stocks fell from two-week highs on Thursday, and China got off to a shaky start on fears central banks were getting closer to winding down their emergency stimulus, while the dollar remained near a one-week high.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 per cent to 691.76 but remained close to Wednesday's record high of 696.76, last seen on May 10.

Chinese stocks began lower, with the blue-chip index falling 0.2 per cent.

Australian shares remained unchanged, while New Zealand's benchmark index fell 0.9 per cent, extending losses for the second day in a row following the country's central bank's announcement on Wednesday of rate increases beginning next year.

The Nikkei 225 index of Japan was down 0.8 per cent. S&P 500 E-Mini futures were down 0.2 per cent.

Global equity markets have been bolstered by a concerted effort by major central banks, which have pumped trillions of dollars into financial markets over the last year while reiterating their lower-for-longer interest rate stance in an attempt to portray any inflation increase as temporary.

Earlier this week, US Federal Reserve Vice Chair Richard Clarida stated that he believed recent inflation pressures would "prove to be largely transitory." However, he added that policymakers would soon be ready to discuss tapering at upcoming meetings.

"While various Fed speakers appeared to allay market concerns, doubt persists," GSFM investment strategist Stephen Miller said.

"Clarida's remarks imply that the Fed is slightly more advanced than the 'not thinking about thinking' stance on monetary tightening that Chairman Jerome Powell described last year - but only slightly."

Overnight, Randal Quarles, the Fed's vice chairman for supervision, suggested that the Fed will need to discuss plans to tighten its asset purchase program at some point.

"What this means is that after a period in which monthly inflation reports were largely ignored as a market focus, they will reclaim the primacy they once held as the most important statistical report," Miller added.

All three major indexes finished higher on Wall Street, with consumer discretionary, communication services, and financial sectors leading the way.

The Dow finished slightly higher, the S&P 500 increased by 0.2 per cent, and the Nasdaq Composite increased by 0.6 per cent.

The dollar index hit a one-week high of 90.152 on Friday.

The euro fell to $1.2173 for the second consecutive session after European Central Bank (ECB) Executive Board Director Fabio Panetta stated that it was premature to begin tapering the ECB's emergency bond-buying program.

Overnight, the New Zealand dollar was one of the best-performing currencies. It fell from a three-month high of $0.7317 to $0.7270 on Thursday.

Gold prices fell below $1,900 per ounce in commodities, its appeal dimmed by a rebounding dollar and rising US Treasury yields.

Spot gold fell 0.2 per cent to $1,892.06 per ounce after reaching a record high of $1,912.50 on Jan. 8.

Brent crude fell 20 cents to $68.76 a barrel, while US crude fell 19 cents to $66.02.

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