Asian shares fell on Thursday while growing violence in Iraq supported oil prices. Japan's Nikkei share average (.N225) led the retreat, falling 0.8 percent while MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.4 percent.
The MSCI Asia Pacific Index decreased 0.4 percent by 2:22 a.m. in Tokyo after the highest close since June 9, 2008. Asia’s regional benchmark index retreated from its highest close in six years while Japan’s Topix index slid 0.2 percent before today’s Bank of Japan meeting. Standard & Poor’s 500 Index futures were little changed. Brent oil climbed 0.3 percent and nickel slipped 0.6 percent.
Wall Street shares stepped back from record levels and Euronext delayed the opening of cash markets due to a “critical issue.” New Zealand’s dollar jumped with the kiwi climbing at least 1.1 percent against 31 major peers following the Reserve Bank increase in interest rates and its signal that more tightening is to come.
The official cash rate was raised by 25 basis points to 3.25 percent, as expected, with the Reserve Bank of New Zealand saying strong housing and building markets were boosting inflation pressures, and surging immigration was also stoking local demand.
The interest rate increase on Thursday is the third consecutive increase within a short time and New Zealand's central bank said further rises would be needed to contain inflation in the booming economy although a strong currency and data would dictate how far and how fast it tightens policy.
Shares Slide
The Dow Jones Industrial Average dropped 0.6 percent and the S&P 500 slipped as investors considered equity valuations. The S&P gauge trades at 16.4 times the projected earnings of its members, up from a multiple of 14.8 -- its lowest valuation this year -- at the beginning of February. The gauge has rallied 12 percent since then.
Hong Kong’s Hang Seng Index (HSI) fell 0.2 percent and a gauge of Chinese companies listed in the city tumbled 0.8 percent. Australia’s S&P/ASX 200 Index fell 0.4 percent and the so-called Aussie retreated 0.1 percent to 93.77 U.S. cents after the country reported a surprise drop in employment. South Korea’s Kospi index retreated 0.4 percent as the central bank left rates unchanged.