3 Minutes to Read by 3 Minutes to Read by 3 Minutes to Read by 3 SINGAPORE/LONDON (Reuters) – Global markets dipped on Thursday, reflecting a drop in Asia due to a broadening crackdown on China’s tech sector and concerns about the country’s economic recovery, while oil prices fell due to supply uncertainties. Showcase ( 2 images ) Markets are still being driven by the pace of economic recovery from the COVID-19 epidemic, as well as its influence on inflation and central bank decisions, with the US Federal Reserve signaling no plans to raise rates anytime soon. All eyes are now on the European Central Bank, which is expected to give a strategy update later in the session that could allow for greater inflation. In early European trading, the MSCI’s benchmark index of global stocks was down 0.4 percent, matching a 1.6 percent drop in the corresponding index of Asia stocks outside Japan to its lowest level since mid-May. China’s efforts to reign in its internet behemoths have fueled this, with the most recent example being Didi, a U.S.-listed company that was recently ordered to remove its app off store shelves. Despite the decrease, the global index is still trading inside a broad trading range that has been in place since late June and is only below its all-time high. Meanwhile, the STOXX Europe 600, a broad index of Europe’s largest corporations, was down 0.9 percent. In addition to the tech crackdown, Chinese officials’ advice toward rate cuts has alarmed some investors by underlining fragility in China’s economy – sluggish credit growth and slow demand – which threatens the global recovery’s pace. On Wednesday, China’s cabinet announced that officials will employ timely reductions in the bank reserve requirement ratio (RRR) to help the real economy, particularly small businesses. On Thursday, the yield on 10-year Chinese government debt fell to its lowest level in nearly a year, falling 7.1 basis points to 2.9996 percent, the lowest since August. Global bond prices rallied further, with the 10-year note up 4 basis points, extending price swings observed earlier in the week and prompting a “serious debate” over their origin, according to Deutche Bank analyst Jim Reid. Some see the increase as an indication that the market is re-pricing the risk of the economy entering secular stagnation following the epidemic, while others point to technical factors such as less Fed supply and higher demand to buy. In currency markets, the dollar fell 0.2 percent against a basket of major counterparts. Cryptocurrencies were sold as a result of new harsh comments from Chinese regulators, with bitcoin hitting a one-week low. Oil prices remained under pressure as a wave of new virus infections swept Asia and the rest of the world, as well as concerns about rising supply following the failure of producer talks. Brent crude futures were down 0.9 percent at $72.77 a barrel, while US crude was down 1.1 percent. Shri Navaratnam, Kim Coghill, and Angus MacSwan edited the piece./n
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