Asian stocks fell, led by Chinese shares as regulators increase scrutiny of margin loans, while U.S. oil traded near an almost six-year low. Bonds in the region rallied while Malaysia’s ringgit weakened.
The MSCI Asia Pacific Index dropped 0.8 percent by 11:03 a.m. in Tokyo, as the Hang Seng China Enterprises Index retreated 1.2 percent. Dow Jones Industrial Average futures gained 0.3 percent after the index’s biggest two-day drop in almost a year. Ten-year Australian bond yields slipped to a record low. The ringgit weakened 0.4 percent as crude traded at $44.45 a barrel in New York, while New Zealand’s dollar was near a four-year low.
Chinese regulators are probing the margin lending that’s helped drive the benchmark Shanghai Composite Index up 47 percent since the end of August. Oil’s bear market is damping inflation prospects and spurring worldwide monetary easing, with New Zealand’s central bank the latest to hint its next move could be a rate cut. The Federal Reserve maintained a pledge to be “patient” on raising benchmark borrowing costs, citing risks to the U.S. economy from an international slowdown.