Australian shares little changed in early trade as markets in China, Japan remain shut

A man looks at an electronic board displaying stock information at the Australian Securities Exchange in Sydney, Australia, on Tuesday, Feb. 6, 2018.

Brendon Thorne | Bloomberg | Getty Images

SINGAPORE — Futures tied to Australia’s benchmark index pointed to a slightly lower open on Wednesday while some of the other major Asia-Pacific markets are closed for the day.

SPI 200 futures were down 0.37% at 7,009 compared to the ASX 200’s last close at 7,067.90.

Wednesday’s session in Asia follows an overnight session on Wall Street where the S&P 500 fell amid selling in Big Tech and other high-growth stocks while the Nasdaq Composite registered its worst day since March.

“Equities traded defensively amid declines in technology stocks and comments from Yellen that the Fed may need to raise interest rates somewhat to prevent the economy from overheating,” analyst at ANZ Research wrote in a morning note.

“There is some concern that the best of the improvement in US earnings may have already occurred after the weaker April ISM manufacturing survey. The reality is that data can’t continuously improve at the pace it did in March and April, but underlying growth is expanding rapidly,” they added.

Markets in China and Japan remain closed for public holidays. South Korean markets are also shut.

U.S. Treasury Secretary Janet Yellen said Tuesday that interest rates may have to rise to keep a lid on the burgeoning growth of the U.S. economy brought on in part by trillions of dollars in government stimulus spending.

The former Fed chair later tempered her comments somewhat on the need for higher rates, saying she respects the Federal Reserve’s independence and was not trying to influence decision-making there.

The Fed has kept short-term interest rates anchored near zero for more than a year, despite an economy growing at its fastest pace in nearly 40 years. 

Currencies and oil

In the currency market, the dollar index, which measures the greenback against a basket of its peers, last traded at 91.288, climbing from levels near 90.600 in the previous week.

The dollar “briefly spiked higher on Yellen’s comments,” according to Kim Mundy, senior economist and currency strategist at the Commonwealth Bank of Australia.

“Yellen’s comments did not specify a timeframe for rises and she clarified her comments by saying that she was not recommending FOMC rate hikes. We still expect the FOMC will be very patient as economic data improves,” Mundy added.

Elsewhere, the Japanese yen changed hands at 109.31 per dollar, relatively flat from its previous close. The Australian dollar traded fractionally higher at $0.7711.

Oil prices traded higher Wednesday during Asian trading hours. U.S. crude futures were up 0.78% to $66.20.

CNBC’s Jeff Cox contributed to this report.

(With Inputs from CNBC)

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