Asian Stocks Retreat as investors watch Greece

By Vivian Atud

Johannesburg-Sunburst Africa– Markets in Asia have opened cautiously this morning with most Asian stocks trading lower as investors await Greece’s review of debt reduction policies.   In Australia, bonds gained in early trade and oil traded at less than $50 a barrel.  In the US, Federal Reserve Chair Janet Yellen will address lawmakers and investors will likely continue to trade cautiously as they await the outcome of this meeting.

According to trading data from Asia, the MSCI Asia Pacific Index was down 0.1 percent by 9:57 a.m. in Tokyo, with five stocks falling for every four that gained. Futures on the Standard & Poor’s 500 Index were little changed after the U.S. gauge closed less than 0.1 percent from a record. Australia’s 10-year bond yield fell five basis points, tracking a rally in U.S. Treasuries. The euro was steady after slipping 0.4 percent yesterday. West Texas Intermediate crude was at $49.57 a barrel.

In Europe, Greece presented creditors with a draft of policies to implement the Feb. 20 deal for continued funding. The list would be given to euro-area members for discussion today according to information coming out of Greece. The US Federal Reserve Chair, Janet Yellen is addressing Congress this week in two testimony starting Tuesday, and investors will be watching for clues on the timing of an interest-rate increase.

However speculations are that the Fed Chair Yellen’s Congressional testimony is likely to reveal little new information about monetary policy as the political theater focuses on political agendas according to US Analyst.

The euro was at $1.1339 yesterday, having weakened 6.3 percent this year versus the dollar. An Approval of the Greek plans would offer a four-month reprieve for the country.

Japan’s Topix Index fell 0.2 percent after closing at the highest since December 2007. Japanese 10-year securities were little changed. BHP was the main support for the S&P/ASX 200 Index, which was little changed near a 6 1/2-year high in Sydney. Australian bonds due in a decade paid 2.53 percent, while the yield on New Zealand notes fell two basis points to 3.34 percent. U.S. debt gained a second day after Greece said it would deliver to euro-area finance ministers this morning its list of commitments required to extend the bailout for four months. Treasuries were at the cheapest levels against their Group of Seven peers in eight years, something Federal Reserve Chair Yellen’s comments may indicate is justified or not.

Italian and Spanish securities surged yesterday, and Portuguese 10-year yields touched a record low, as the accord avoided a cash crunch that threatened to push Greece out of the currency bloc.

The Stoxx Europe 600 Index advanced for a fifth day to extend the highest level since 2007. The U.K.’s FTSE 100 Index surpassed a record close in intraday trading before closing, little changed as lower-than-projected profit at HSBC Holdings Plc pushed the stock lower. Greece’s ASE Index slipped 4.5 percent last week. The market was closed on Monday for a holiday.

In the US, Six of the 10 main S&P 500 groups retreated yesterday, with phone shares losing 0.6 percent to lead declines. U.S. stocks posted their longest streak of weekly gains since the beginning of December as Greece reached a deal on Feb. 20 to extend its bailout program and investors speculated the Fed will keep rates lower for longer even as the economy shows signs of picking up speed.

Sales of previously owned U.S. homes fell more than expected in January as a tight supply forced up prices, showing the residential real-estate market faces an uneven recovery. Purchases slowed 4.9 percent to a 4.82 million annualized rate, the least since April, according to figures from the National Association of Realtors.

Investors are likely to continue to trade cautiously on the JSE this morning as they continue to watch what happens globally. Greece’s submission to the EU, the outcome of the US Fed meeting, and what happens to oil prices will be watched closely as well.

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