Asia’s major stock indexes saw a mixed end to the week on a day of subdued trading with worries over China’s stumbling recovery and warnings of a tech slump weighing on investors’ minds.
The mood was also becalmed after earnings reports from Tesla and Netflix failed to dazzle, while the dollar and Treasury yields held gains ahead of an action-packed week that could see the end of the US tightening cycle.
Tokyo stocks retreated, weighed down by semiconductor-linked shares on a weak earnings forecast from the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Co, while bargain-hunting helped limit losses.
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Domestic semiconductor industry giants Tokyo Electron and Advantest each plunged more than 5% in the morning session to shave 180 index points from the Nikkei between them.
The Nikkei share average fell 0.57%, or 186.27 points, to close at 32,304.25, while the broader Topix was ahead 0.06%, or 1.30 points, to 2,262.20.
Decliners were led by marine transportation and metal product issues, while gainers included mining, and electric power and gas shares.
China stocks were roughly flat as new measures aimed to help the auto and electronics sectors failed to lift sentiment while Hong Kong shares climbed, lifted by its tech stocks.
The yuan was range-bound on Friday after authorities stepped up efforts to defend a weakening currency, alongside yuan-buying trades by state-owned banks.
And concerns are also brewing over the health of Chinese property developers, after rating agencies warned Wanda Commercial could default on its debt repayment. Dollar bonds of Country Garden tumbled on Friday.
The Shanghai Composite Index dropped 0.06%, or 1.78 points, to 3,167.74, while the Shenzhen Composite Index on China’s second exchange lost 0.19%, or 3.82 points, to 2,011.83.
The Hang Seng Index gained 0.78%, or 147.24 points, to 19,075.26.
Elsewhere across the region, Manila and Jakarta edged up but Sydney, Singapore, Seoul, Mumbai, Taipei and Wellington dipped. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.5%, heading for a weekly loss of 1.8%.
Eyes on US Fed, ECB, BoJ Meetings
European shares were set for a lower open, with Eurostoxx 50 futures off 0.3%. S&P 500 futures and Nasdaq futures were up 0.1%.
As well as the US Federal Reserve and European Central Bank meetings next week, the Bank of Japan will meet amid speculation of imminent policy tweaks. Early on Friday, Japan’s inflation stayed above the central bank’s target of 2% for the 15th straight month in June, but gains matched a median market forecast.
On Wall Street, after rallying almost 40% since the turn of the year, the Nasdaq fell 2% overnight, the biggest one-day loss since March, driven by steep post-earnings plunges in mega tech stocks Tesla and Netflix.
The electric-vehicle maker reported a drop in its second-quarter gross margins to a four-year low while the streaming video company’s quarterly revenue fell short of estimates.
Also, an unexpected fall in the US weekly jobless claims fuelled expectations for a strong payrolls report, after markets braced for higher interest rates in the US and Europe.
Ten-year Treasury yields were mostly flat in Asia at 3.8487%, after spiking 11 basis points overnight, while two-years held at 4.8286%, having gained 8 bps overnight.
The US dollar index was little changed at 100.78, after advancing 0.5% overnight, the biggest one-day gain since mid-May.
Elsewhere, oil prices were higher. Brent crude futures were up 0.8% at $80.27 per barrel and US West Texas Intermediate crude futures rose 0.8% to $76.25. Gold prices were flat at $1,969.95 per ounce.
Key figures
Tokyo – Nikkei 225 < DOWN 0.57% at 32,304.25 (close)
Hong Kong – Hang Seng Index > UP 0.78% at 19,075.26 (close)
Shanghai – Composite < DOWN 0.06% at 3,167.74 (close)
London – FTSE 100 > UP 0.04% at 7,649.03 (0934 GMT)
New York – Dow > UP 0.47% at 35,225.18 (Thursday close)
- Reuters with additional editing by Sean O’Meara
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