Global equities are faltering as Didi’s delisting raises concerns between the US and China

Passers-by with protective face masks walk past an electronic board showing the world’s stock indices, in the midst of the coronavirus pandemic (COVID-19), in Tokyo, Japan on November 1, 2021. REUTERS / Issei Kato

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SYDNEY, December 3 (Reuters) – Shares fell Friday after Chinese giant Didi said it would delist in New York, renewing concerns about US-China tensions and technology regulation as oil moves toward a six-week drop in row on Omicron and concerns about interest rate hikes.

S&P 500 futures fell around 0.5%. Hong Kong’s Hang Seng (.HSI) fell 1.3%, drawn by big technology names. MSCI’s index of Asian equities outside Japan (.MIAPJ0000PUS) fell 0.7%.

The risk-sensitive Australian dollar fell 0.3% and is just under 71 cents close to a one-year low.

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Didi (DIDI.N) clashed with Chinese regulators by pushing ahead with its $ 4.4 billion IPO in July and told Weibo that they wanted to move the IPO to Hong Kong. read more

“Deletions that are starting to happen give a little nervousness about the uncertainty about how this will affect the broader picture between the US and China,” said Bank of Singapore analyst Moh Siong Sim.

The news of Didi comes the day after the Singapore-based tour and delivery company Grab (GRAB.O) fell more than 20% on its Nasdaq debut. The listing is the largest on Wall Street by a Southeast Asian company. read more

Broader markets have been fooling around with some harsh news about Omicron this week, driving the CBOE volatility index (.VIX) towards its biggest leap in one week since pandemic chaos in February 2020. Short-term returns have also increased as investors opt for higher prices, even with Omicron uncertainty.

Traders must wait at least a week or so for an early reading on the variant’s virulence or vaccine resistance. US labor data coming later on Friday is also in focus as a guide for rates.

Benchmark-burned oil futures ended higher overnight at $ 69.67 a barrel, but have fallen more than 3% this week and are down more than 18% from the October three-year high.

So far, in the absence of Omicron details, some governments have struggled to close borders anyway. But other decision-makers – particularly the Federal Reserve – are cautious in their plans to move away from crisis response.

Fed Chairman Jerome Powell said central bankers would talk about a faster withdrawal to bond purchases at this month’s meeting and stop describing inflation as temporary. The oil cartel OPEC continues with planned production increases. read more

“The Fed does not ignore the Omicron threat, but chooses not to let it delay the political response that suggests a more business than usual perspective,” said Commonwealth Bank of Australia strategist Tobin Gorey.

“OPEC + has done a similar thing,” he added. “Neither of them has cooled the planned policy changes … and both are perhaps examples that suggest shutdown reactions to epidemic waves are becoming less likely.”

The bond market’s response to Powell’s hawk shift has been to raise short-term interest rates and push down long-term ones, and expects faster increases to end up dampening future inflation and growth, and sharply flattening the US yield curve.

Two-year government interest rates were stable in early Asian trade, with a weekly rise of almost 10 basis points.

The benchmark interest rates on 10-year government bonds, on the other hand, fell almost 6 bps to 1.4291% this week, and 30-year interest rates are down 7.3 bps to 1.7545%.

“It’s inflation, not growth, that makes the Fed accelerate austerity plans,” said Kit Juckes, a strategist at Societe Generale in London.

“For the first time in ages, the risk of this US economic cycle is that it will end faster than consensus forecasts expect,” he said, predicting that the upward momentum of the US dollar may slow to a peak around the middle of next year.

Investors sold more risky currencies on Friday. The risk-sensitive Australian and New Zealand dollars lost about 0.3% each. The euro was stable at $ 1.1298 and the yen firm at 113.08 per dollar.

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Reporting by Tom Westbrook; Edited by Sam Holmes

Our standards: Thomson Reuters Trust Principles.

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