Asia’s major markets ended the week on a downbeat note with investor mood low over the gloomy global economic picture, the threat of an escalation in the US-China trade war and a lacklustre leadership summit in Beijing.
Uncertainty across major economies added to the headwinds for investors despite the global rate easing cycle getting under way.
It has been a turbulent week for the markets, with a tech sell-off sparked by deepening Sino-US tensions, uncertainty over US President Joe Biden’s fate in the presidential race, disappointing Chinese economic data and a undramatic third plenum casting a shadow over the global mood.
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Japan’s Nikkei share average fell, tracking overnight Wall Street declines, although a rebound in semiconductor stocks limited the losses.
The Nikkei share average edged down 0.16%, or 62.56 points, to close at 40,063.79. The benchmark fell below the key psychological mark of 40,000 for the first time since July 2 earlier in the session, after declining more than 2% on Thursday, as chip-related shares slumped and a stronger yen weighed.
The broader Topix finished 0.27% lower at 2,860.83.
However, investors later appeared to rethink the recent sell-off of chip-related shares, partly in response to better-than-expected earnings results from TSMC, the world’s largest contract chipmaker.
Nikkei heavyweights Tokyo Electron and Advantest climbed 2.3% and 1.6%, respectively, to give the biggest boost to the index.
In China, investors were left disappointed over the lack of details on economic policy goals at the conclusion of its closely watched plenum on Thursday.
Chinese officials acknowledged that the sweeping list of economic targets contained “many complex contradictions”, pointing to a bumpy road ahead for policy rollout.
Chinese blue-chips were last a touch higher, though the CSI300 Real Estate index slid more than 2% as an anaemic property sector continued to weigh on China’s growth outlook.
The Shanghai Composite Index gained 0.17%, or 5.18 points, to 2,982.31, while the Shenzhen Composite Index on China’s second exchange advanced 0.33%, or 5.30 points, to 1,604.59.
But the Hang Seng Index dropped 2.03%, or 360.73 points, to 17,417.68, with traders tracking the global mood.
US Dollar on Front Foot
Elsewhere across the region, in earlier trade, there were also losses in Sydney, Seoul, Mumbai, Singapore, Taipei, Wellington and Jakarta. MSCI’s broadest index of Asia-Pacific shares outside Japan slid 1.56% and was headed for its worst week in three months and a nearly 3% loss.
European shares looked set for a mixed start, with Eurostoxx 50 futures up 0.08%, while FTSE futures fell 0.4%. S&P 500 futures tacked on 0.16%, while Nasdaq futures gained 0.3%.
In the foreign exchange market, Tokyo’s recent bouts of intervention also kept traders on edge.
The euro was last 0.08% lower at $1.0887, having fallen 0.4% in the previous session after the European Central Bank (ECB) kept rates on hold as expected but left the door open to a September cut as it downgraded its view of the euro zone’s economic prospects.
The dollar was meanwhile on the front foot, distancing itself from a four-month low hit earlier in the week against a basket of currencies.
The dollar was partially underpinned by strong US manufacturing data and jobless figures that did little to suggest a significant slowing in the labour market, though traders are still pricing in a September rate cut from the Federal Reserve.
In commodities, oil prices fell. Brent crude futures eased 0.46% to $84.72 a barrel, while US crude futures slid 0.59% to $82.33 per barrel.
Gold fell 0.8% to $2,424.93 an ounce, retreating from a record high hit earlier this week on the prospect of lower global interest rates.
Key figures
Tokyo – Nikkei 225 < DOWN 0.16% at 40,063.79 (close)
Hong Kong – Hang Seng Index < DOWN 2.03% at 17,417.68 (close)
Shanghai – Composite > UP 0.17% at 2,982.31 (close)
London – FTSE 100 < DOWN 0.58% at 8,157.71 (0933 BST)
New York – Dow < DOWN 1.29% at 40,665.02 (Thursday close)
- Reuters with additional editing by Sean O’Meara
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