Asian stocks are on a losing streak not seen in years

Photo: Matej Divizna/Getty Images

Asian stocks are not having the best of sessions on Wednesday, continuing the unwind that began last week.

Here’s the scoreboard as at 4.25pm in Sydney.

Australia ASX 200 5946.10 , -0.43%
NZ NZX 50 8130.86 , -0.56%
Japan TOPIX 1764.17 , -1.50%
Shanghai Comp 3274.20 , -0.89%
Shenzhen Comp 1858.56 , -0.45%
HK Hang Seng 28392.88 , -1.56%
Sth Korea KOSPI 2478.81 , -1.25%
Sinagpore STI 3409.71 , -0.82%
Taiwan TAIEX 10397.72 , -1.60%
Philippines PSI 8183.92 , 0.48%
Indonesia JKSE 6040.07 , 0.66%
Malaysia KLCI Index 1719.81 , -0.29%
Thailand SET 1693.48 , -0.24%
India Nifty 50 10086.1 , -0.32%
S&P 500 Futures 2623.25 , -0.19%

Most markets are down across the region, and heavily in some circumstances, with shares in Japan, Hong Kong, Taiwan and South Korea all down by more than 1%.

While US markets have wobbled in the past two sessions, opening higher only to fall back into the red, the weakness in Asian stocks has lasted more than a week, lead by an unwind in Chinese equities following a spike in Chinese bond yields in late November.

The prospect of US tax reforms, and with it higher US interest rates and dollar, may have also been a factor behind the recent weakness, said analysts at the Institute of International Finance.

“Anticipation of Senate approval of the US tax reform bill — which has supported some repricing of the Fed funds curve — has weighed on EM portfolio flows [since the start of December],” the group said in a note released on Tuesday. “Profit-taking also looks to be a factor.”

According to Bloomberg, the MSCI Asia Pacific Index is currently on track to record its eighth consecutive daily decline, the longest run of losses since 2015.

However, putting that statistic into perspective, this is the daily chart of index going back three years.

Source: Thomson Reuters

A more than 4.4% plunge in copper prices overnight, leading broad-based weakness across most base and bulk commodity prices, is also weighing on sentiment, prompting profit-taking among investors after a solid run this year.

Chinese commodity futures have extended that move today with most contracts nursing losses of more that 1.5%.

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