By Shriya Ramakrishnan
Aug 26 (Reuters) - Asian stocks drifted lower on Wednesday as grim U.S. data raised concerns about the global recovery, while currencies held in tight ranges as investors awaited Federal Reserve Chairman Jerome Powell's views on monetary policy and the economy.
Following a day of buoyant gains for stock markets across the region on signs of progress in U.S.-China trade negotiations, China .SSEC and Singapore .STI led early selling after a wobble on Wall Street overnight.
With U.S. consumer confidence dropping to a six-year low, Seoul's export-focused KOSPI .KS11 index was set to snap a three-day winning streak and the won KRW=KFTC dipped as health authorities warned that South Korea was on the brink of a nationwide COVID-19 outbreak.
"Investors are getting increasingly sceptical about this tech-driven rally in the U.S. There is nothing to be happy about and the reality is that majority of the businesses are facing a very difficult time...that's the ugly truth," said Margaret Yang, a Singapore-based Strategist at DailyFX.
"The pattern is very defensive and investors are pulling off their hands from cyclicals showing confidence is very fragile."
Coronavirus cases also continued to surge in Indonesia and the Philippines, sending both indexes lower. The Philippines has the largest number of infections in Southeast Asia, and Indonesia the highest COVID-19 death toll.
In currency markets, traders were firmly focused on Powell's speech on the U.S. central bank's policy framework review, due at this year's virtual edition of the Jackson Hole symposium on Thursday.
Investors are waiting to see if Powell signals a shift in the Fed's inflation target to an average, which would allow inflation to rise more quickly than in the past.
"If Powell's speech turns out to be dovish, that will sustain the downward momentum in dollar/Asia especially with most Asian central banks being less dovish," said Frances Cheung, head of macro strategy for Asia at Westpac.
India's rupee INR=IN, which surged on Monday after the central bank halted a campaign of intervention against the currency, was steadier at the start of trade as dealers reported the bank had returned to the market on Tuesday afternoon.
The Thai baht THB=TH was among the top gainers during the day, rising 0.5% against the dollar, with sentiment getting a boost from more stimulus measures to support domestic tourism in Southeast Asia's second-largest economy.
** Top losers on FTSE Straits Times Index .STI include SATS Ltd SATS.SI down 4.5% at S$2.96, United Overseas Bank UOBH.SI down 2.5% at S$19.55; Singapore Airlines SIAL.SI down 2.1% at S$3.72
** Top losers on FTSE Bursa Malaysia Kl Index .KLSE include Petronas Chemicals Group Bhd PCGB.KL down 2.2% at 5.82 ringgit, Public Bank Bhd PUBM.KL down 1.7% at 16.68 ringgit
Asia stock indexes and currencies at 0451 GMT
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(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Patrick Graham and Kim Coghill)
((Shriya.Ramakrishnan@thomsonreuters.com; +91 8061822842 ;))
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