Reuters - Asia equities eased from records Thursday on stalled U.S. virus aid talks and selling in technology-company stocks. Foreign exchange traders were on a knife's edge as last-ditch Brexit negotiations yielded an agreement to keep talking only.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.34%. Japan's Nikkei erased early losses to trade 0.1% lower. Both are up more than 60% from March lows. S&P 500 futures, meanwhile, pared early gains and steadied in Asia afternoon trade.
U.S. Treasurys rose while the dollar eased after a volatile overnight session in currency markets - with traders now looking ahead to a European Central Bank monetary policy meeting. Sterling teetered at $1.3366 as it waits for a Brexit resolution.
"We've risen so far so fast that it's making investors cautious," Michael McCarthy, chief strategist at stockbroker CMC Markets in Sydney, said.
"The fall in tech stocks was a bit of a concern, given that they've risen in all market weather over the last six weeks, so to see them come off might signal that we're looking at a short-term corrective move."
A near 2% drop in the Nasdaq on Wednesday was driven by a 1.9% fall in Facebook shares after U.S. regulators filed lawsuits alleging the company used its dominance to buy or crush rivals, harming competition.
Meanwhile, S&P Dow Jones Indices said Thursday it would remove 10 China companies from its equities indices and several others from its bond indices.
A Trump administration order prohibits purchases by U.S. investors of certain China securities. Index provider FTSE Russell did the same last week.
Cautious trading in Asia came as a result of widespread uncertainty surrounding long-running U.S. pandemic relief negotiations and talks between Britain and the European Union over trade arrangements post Brexit.
U.S. lawmakers approved a stopgap government funding bill Wednesday but were unable to sort out disagreements over aid to state and local governments that are holding up a broader spending package.
British and EU leaders meanwhile gave themselves until the end of the weekend to seal a new trade pact, with some $1 trillion in annual trade at risk of tariffs if they can't reach a deal by Dec. 31, when transition arrangements end.
British and European futures slipped marginally in Asia - with FTSE futures little changed and Eurostoxx 50 futures down 0.14%.
Investor concentration will shift toward a European Central Bank meeting later Thursday where the central bank is expected to announce more bond buying and cheap loans.
Traders are also looking to see whether the ECB will say anything about a near 14% rise in the common currency from March lows, which is hindering Europe's exporters.
"We do not think there will be an explicit talking down of the euro, but expect ECB chief (Christine) Lagarde to mention the central bank is keenly monitoring the currency strength," Singapore's OCBC Bank said.
Elsewhere, faith in the recovery appears to be holding up, with oil prices steady despite a buildup in U.S. inventories. Brent crude futures last sat 0.27% firmer at $49.13 a barrel and U.S. crude was up 0.29% at $45.81 a barrel.
Gold nursed losses at $1,839 an ounce.
Treasurys traded firmly owing to uncertainty around U.S. stimulus wrangling, and the yield on benchmark U.S. ten-year bonds fell 1.2 basis points to 0.9278%.
"The uncertainty around the timing is less important than the uncertainty around the overall size of the package, which depends primarily on the outcome of the Senate runoffs in Georgia on Jan. 5," Goldman Sachs said.
"For now, our assumption is a $700 billion COVID relief package," it said, adding it would be upgraded to between $1 trillion and $1.5 trillion if Democrats win the two seats.
