Stocks skid as China's NPC disappoints, bitcoin nears record

Asian markets news: Chinese stocks stumbled on Tuesday, dragging Asian peers with them, as investors showed their disappointment at Beijing's plans to support the economy as its week-long annual session of parliament, the National People's Congress, got underway.

Equities around the rest of the region were also on the back foot following a retreat from record highs on Wall Street overnight on signs the U.S. Federal Reserve is in no hurry to cut interest rates. U.S. stock futures also pointed lower.

Bitcoin continued its ascent to a fresh two-year peak of $68,650.87 that put it within spitting distance of an all-time high. Gold marked a record closing high of $2,114.99 on Monday and continued to hover at that level in the latest session.

Japan's Nikkei slid 0.59 per cent after reaching a fresh peak on Monday, while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.4 per cent.

Chinese blue chips lost 0.2 per cent, and Hong Kong's Hang Seng slumped 1.3 per cent.

"China is aiming to lower their fiscal budget to 3 per cent GDP, from a gap of around 3.8 per cent in 2023, suggesting large fiscal stimulus is off the table for now," said James Kniveton, senior corporate FX dealer at Convera.

"Stability is still the overriding factor in Chinese policy making and the announcements so far seem to conform to that philosophy."

Meanwhile, alternative assets like cryptocurrencies and bullion have been supported and equities sold following hawkish comments from Atlanta Fed President Raphael Bostic that there is no urgency to cut interest rates amid risks inflation stays above the central bank's 2 per cent target.

Those remarks frayed nerves ahead of Fed Chair Jerome Powell's semi-annual testimony to Congress later in the week, as well as a deluge of key data on prices and jobs, culminating with Friday's non-farm payrolls report.

"There are signs of slight irrational exuberance and maybe a squeeze of long-suffering shorts in some markets," particularly bitcoin and gold, said Kyle Rodda, senior markets analyst at Capital.com.

"The moves have come despite only a minor shift in rates market pricing."

Odds for a U.S. rate reduction by the Fed's May meeting declined below 22 per cent from 26 per cent a day earlier, according to CME Group's FedWatch Tool.

The dollar index, which measures the currency against six major peers, was last flat at 103.83. It eased 0.07 per cent on Monday, as declines against rivals like the euro and sterling overshadowed gains against the yen.

The euro was little changed at $1.08525, after advancing 0.14 per cent on Monday, with the European Central Bank due to set policy on Thursday.

Sterling was steady at $1.26895, following a 0.3 per cent rise at the start of the week, in the run-up to Wednesday's UK budget.

Against the yen, the dollar eased 0.07 per cent to 150.41, giving up a little of Monday's 0.27 per cent climb. The currency pair tends to be extremely sensitive to moves in long-term U.S. bonds, and benchmark 10-year Treasury yields bounced from 2 1/2-week lows overnight to sit at 4.217 per cent in Asian time on Tuesday.

Elsewhere, crude oil continued to tick lower on Tuesday, as demand headwinds counterbalanced a widely expected extension of voluntary output cuts through the middle of the year by the OPEC+ producer group. [O/R]

Brent futures were off 11 cents to $82.69 a barrel, while U.S. West Texas Intermediate (WTI) eased 19 cents to $78.55 a barrel.