by Yuri Kageyama
TOKYO (AP) – Asian shares fell mostly on Thursday after stock indices tumbled on Wall Street.
Japan’s benchmark Nikkei 225 fell 0.7% to 29,490.53 in early trade. Australia’s S&P/ASX 200 gained 0.2% to 7,381.40, while South Korea’s Kospi fell 0.6% to 2,944.52. Hong Kong’s Hang Seng fell 1.7% to 25,227.83. The Shanghai Composite ended 0.5% lower at 3,520.77.
Yep Joon Rong, market strategist at IG in Singapore, said: “Without overnight positive gains from Wall Street and a relatively calm day in terms of economic data, sentiment in the region could be impacted, potentially with some sideways movement.” It is possible.”
Recent government data showed that the coronavirus pandemic is hurting the Japanese economy. One reason is the lack of supply of chips and other parts needed to produce autos, the mainstay of the world’s third-largest economy.
Another factor is the damage to consumer spending from recent government measures to close restaurants early and open theaters to limited crowds. Japan has never had a lockdown, but has called for a “state of emergency” from time to time to stop the spread of infection.
Junichi Makino, chief economist at SMBC Nikko Securities, said the Japanese recovery that was initially expected to begin this year may not come until fiscal 2022, which begins in April.
“But excessive pessimism is not called for. Auto production is likely to return to normal by the October-December quarter,” he said.
Investors are also watching next week’s Bank of Korea policy-setting meeting to see if the central bank will raise its key rate. Policy makers have indicated such a move.
On Wall Street, the S&P 500 fell 0.3% to 4,688.67, having previously swept between a small gain and a 0.4% drop. It is just 13.03 points below its all-time high of a week and a half ago.
The Dow Jones Industrial Average was down 0.6% at 35,931.05 and the Nasdaq Composite was down 0.3% at 15,921.57.
The 4.7% drop for Visa was one of the heaviest loads on the market. It fell after Amazon said it would not accept UK-issued Visa credit cards amid a dispute over fees.
Most stocks in the S&P 500 also sank, while smaller stocks in the Russell 2000 Index fell even more, down 1.2%. But gains in some heavyweight stocks helped offset losses. Apple climbed 1.6% and Tesla 3.3%. Since they are the two largest stocks by market value on Wall Street, their movements carry additional weight on the S&P 500.
Yields in the US government bond market, which have been the center of some of Wall Street’s most turbulent activity recently, bounced back after a week of huge gains. The yield on the 10-year Treasury fell to 1.59% from 1.63% late Wednesday.
Shares have mostly risen over the past month as companies widely reported stronger profits than analysts expected. Several big retailers joined the parade on Wednesday, including Lowes, Target and TJX, which runs TJ’s Max and Marshalls stores. But the reaction of the stock market was not uniform.
TJX rose 5.8% after reporting stronger than expected revenue and earnings for the latest quarter. Home improvement retailer Lowe’s rose 0.4% as it raised its revenue forecast for the year following strong third-quarter financial results.
But Target fell 4.7%, even though it reported better-than-expected earnings. The company said it made less than $1 each in sales during the quarter, compared to a year earlier, as it was squeezed by higher inventory and supply-chain costs, among other things.
Such pressures – and how much they affect companies’ bottom lines – are under the microscope as relatively high inflation continues to sweep the world. Many companies have warned that their profit margins could suffer because of supply-chain problems and the high cost of everything from workers’ wages to raw materials.
A report from the housing market showed some of those pressures. Contrary to economists’ expectations for growth, builders broke ground in fewer homes last month than in September. But the number of building permits also rose higher than expected, perhaps showing that homebuilders see those pressures finally easing.
In energy trading, benchmark US crude fell 72 cents to $77.64 a barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, it fell by $ 2.40 to $ 78.36 per barrel. International benchmark Brent crude fell 32 cents to $79.96 a barrel.
In currency trading, the recent stall in the dollar’s rally is helping to put Asian markets in a wait-and-see mood. The US dollar fell from 114.14 JPY to 113.99 JPY. Euro price is $1.1332, higher than $1.1322.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
AP Business Writers Damien J. Trois and Stan Cho contributed.