Asia’s major markets gave up early gains on Wednesday after an initial boost from a less than hawkish US Fed chair was cancelled out by earnings worries and fears over an escalation in tensions following the China spy balloon saga.
Federal Reserve Chair Jerome Powell lifted sentiment and fuelled investor hopes that the central bank may soon ease monetary policy after he reiterated that disinflation has begun – but he warned Friday’s eye-popping jobs report showed why the battle against inflation will “take quite a bit of time.”
That gave Japan’s Nikkei an early-session lift but heavy selling of big tech names including Nintendo and SoftBank Group, following disappointing financial results, erased any feel-good factor from Wall Street’s rally overnight.
Also on AF: India’s Adani Ponders Independent Review After Market Rout
Startup investor SoftBank Group tumbled 5.1% after slumping to a quarterly loss, while video-game maker Nintendo plunged 7.5% after trimming its profit forecast.
Electronics maker Sharp Corp plummeted 12.6% to be far and away the Nikkei’s biggest decliner, following its own earnings miss.
The Nikkei lost 0.29% to close at 27,606.46, after starting the day on the front foot following strong gains for all of the big three US stock indexes. The broader Topix was up 0.03%, or 0.57 points, to 1,983.97.
China and Hong Kong stocks ended lower too in thin trade as the ongoing US-China balloon spat weighed on sentiment, while some investors waited for more proof of economic recovery.
US Senate Democratic leader Chuck Schumer said relations with China were strained and the Biden administration is looking at other actions it can take after shooting down what it called a Chinese surveillance balloon over the weekend.
China Blue Chips Drop
Meanwhile, China declined a US request for a phone call between defence chiefs, a Pentagon spokesperson said on Tuesday.
China’s blue-chip CSI 300 Index dropped 0.44%, while the Shanghai Composite Index was down 0.49%, or 15.99 points, to 3,232.11. The Shenzhen Composite Index on China’s second exchange retreated 0.54%, or 11.58 points, to 2,141.31.
The Hang Seng Index dipped 0.07%, or 15.18 points, to 21,283.52 and Hang Seng China Enterprises Index declined 0.59%.
Baidu retreated 3.1% after a 15% jump on Tuesday as it plans a March launch of their ChatGPT-like AI chatbot called Ernie Bot.
Elsewhere across the region, Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta all rose but Bangkok fell.
Indian stocks also advanced with Mumbai’s signature Nifty 50 index up 0.78%, or 138.15 points, at 17,859.65.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.7% higher. The index is up about 8% for the year after shedding nearly 20% last year.
Biden Address Boosts Dollar
Futures indicated the mood would be upbeat in Europe, with the Eurostoxx 50 futures up 1.07%, German DAX futures 1.01% higher and FTSE futures up 0.59%.
Meanwhile, US President Joe Biden in his State of the Union speech challenged Republicans to lift the US debt ceiling and support tax policies that were friendlier to middle class Americans.
In the currency market, the dollar pulled back a bit after the speech. The dollar index, which measures the US currency against six major rivals, was at 103.29, having dropped to as low as 102.99 in the previous session.
The Japanese yen was flat at 131.08 per dollar, after surging 1.2% in the previous session.
Oil prices were little changed on Wednesday, after gaining in the previous two days, with Brent crude at $83.66, down 0.04% on the day, after jumping 3.3% in the previous session.
US West Texas Intermediate crude futures rose 0.17% to $77.27 per barrel, after jumping 4.1% in the previous session.
Key figures
Tokyo – Nikkei 225 < DOWN 0.29% at 27,606.46 (close)
Hong Kong – Hang Seng Index < DOWN 0.07% at 21,283.52 (close)
Shanghai – Composite < DOWN 0.49% at 3,232.11 (close)
London – FTSE 100 > UP 0.66% at 7,916.43 (0937 GMT)
New York – Dow > UP 0.78% at 34,156.69 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
Read more:
SoftBank in The Red as Vision Fund $5.52bn Slump Weighs
Shares of Japanese Tech Giants Plunge on Weak Earnings
US Says It’ll Stay Calm as China Admits Second ‘Spy’ Balloon
