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Sunday, December 04, 2022

Asian stocks tumble on weak Japan manufacturing data

Asian stocks tumble on weak Japan manufacturing data

BANGKOK ( Associated Press) – Asian stocks were mixed on Friday after another day of gains on Wall Street amid a flurry of news about the economy, interest rates and corporate profits.

Tokyo, Shanghai and Hong Kong gained, while Sydney and Seoul declined. US futures declined while oil prices rose.

An early reading on factory activity for Japan showed output and new orders contracting to their worst level in months. Economists said companies attributed raw material shortages and rising costs, but demand could weaken as the country grapples with another wave of the coronavirus outbreak.

“July’s Purchasing Managers’ Index” suggests the manufacturing sector is slowing as demand weakens, while the latest COVID-19 is starting to impact the services sector, said Marcel Thieliant of Capital Economics in a commentary.

Japan reported its inflation slowing in June, with food prices rising 6.5% year-on-year, compared to 12.3% in May and energy cost growth falling from 20.8% to 16.5%. Core inflation excluding volatile energy and food prices rose to 2.6% from 2.2% a month ago.

The Bank of Japan has indicated that unlike the Federal Reserve and other central banks, however, it does not intend to raise its minus 0.1% benchmark interest rate to counter the trend, as wages are not rising in tandem with prices. is disrupting consumer demand.

Tokyo’s Nikkei 225 index rose 0.4% to 27,914.66, while the Hang Seng in Hong Kong rose 0.3% to 20,624.18. Australia’s S&P/ASX 200 fell less than 0.1% to 6,791.50.

In South Korea, the Kospi fell 0.6% to 2,393.14. The Shanghai Composite Index rose 0.1% to 3,274.15.

Most of the focus this week has been on Europe. european central bank As expected, it opted to raise its prime interest rate on Thursday, ending a one-year experiment with negative interest rates. This was its first increase in 11 years.

A major pipeline carrying Russian natural gas The area reopened, although concerns remained at 40% capacity that Moscow might restrict supplies to punish Ukraine’s allies. In Italy, Premier Mario Draghi resigns After the breakup of their ruling coalition. This adds further uncertainty as Europe struggles with the war in Ukraine, high inflation and the potential for trouble in Europe’s bond markets.

On Wall Street, the S&P 500 climbed 1% on Thursday to 3,998.95, returning to its highest level in six weeks. The Dow rose 0.5% to 32,036.90 and the Nasdaq rose 1.4% to 12,059.61.

The Russell 2000 closed at 1,836.69, up 0.5%.

Stocks briefly lost after President Joe Biden tested positive for COVID.

The Federal Reserve is set to raise rates for the fourth time this year next week, once again trying to quell high inflation without dragging the economy into recession.

Some parts of the US economy are already beginning to soften.

Number of workers applying for unemployment benefits Last week was the highest in eight months, although it is relatively low. A separate report released Thursday showed manufacturing in the mid-Atlantic region is weaker than economists expected.

Strong profits from large US companies have taken a toll on Wall Street this week.

Tesla It climbed 9.8% in earlier trading after the electric-automaker reported spring results that were better than analysts were expecting. It was the biggest gainer in the S&P 500.

Shares of energy companies also fell as US crude oil prices fell by 3.5%.

Early Friday, US benchmark crude oil rose $1.40 to $97.75 a barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the pricing base for international trade, rose $1.31 to $100.79 a barrel.

In currency trading, the US dollar bought 137.85 Japanese yen, up from 137.41 late Thursday. The euro fell from $ 1.0230 to $ 1.0199.

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