Asia’s major stock indexes continued to retreat on Wednesday, pushed back by gloomy global forecasts and no sign yet of a turnaround in US interest rates or for China’s struggling economy.
The outlier continued to be Japan where the Nikkei share average ended at its highest in 34 years as technology shares tracked overnight gains in US peers, while a weaker yen boosted exporters.
The Nikkei index jumped 2.01% to close at 34,441.72, its highest close since February 1990. The broader Topix rose 1.30% to 2,444.48, its highest since March 1990.
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The Japanese yen weakened against the dollar in Asian trade ahead of US inflation data later this week that could influence the Federal Reserve’s policy. A softer yen helps exporters as it increases the value of overseas profits in yen terms when firms repatriate them to Japan.
Chip-making equipment maker Tokyo Electron gained 1.91% while Sony Group rose 3.82% to become the biggest boost for the Topix.
China stocks dipped again to their lowest since February 2019, while Hong Kong shares headed to a seven-day losing streak, as the absence of market catalysts kept investor sentiment low.
Uncertainties surrounding the upcoming Taiwan election also distracted investors. On Tuesday, the Taiwan government issued a mistaken air raid alert after the Chinese rocket carrying a science satellite flew over southern Taiwan.
The blue-chip CSI 300 Index dipped 0.47% while the Shanghai Composite Index lost 0.54%, or 15.55 points, to close at 2,877.70. The Shenzhen Composite Index on China’s second exchange dropped 0.76%, or 13.29 points, to 1,732.74.
Hong Kong-listed tech giants slipped 0.4%, heading for a fourth consecutive day of declines. The Hang Seng Index fell 0.57%, or 92.74 points, to 16,097.28.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Singapore, Taipei, Manila, Wellington and Jakarta all fell. Mumbai edged ahead.
Global stock indexes mostly dipped and Treasury yields edged higher on Tuesday, with investors bracing for key US inflation data this week and the start of fourth-quarter company earnings.
Bitcoin rose, then fell, on confusion late on Tuesday afternoon over whether the US Securities and Exchange Commission had approved spot bitcoin exchange-traded funds.
US Consumer Prices
All eyes will be on the US consumer prices report for December, due on Thursday. It is expected to show headline inflation rose 0.2% in the month and by 3.2% on an annual basis.
Investors are looking for clues on when the Federal Reserve may begin cutting interest rates. Expectations the US central bank could begin cutting rates as soon as March have decreased, with CME’s FedWatch Tool showing a 65.7% chance for a cut of at least 25 basis points (bps) for the month, down from 79% a week ago.
Ahead of the US earnings season kicking off on Friday, shares in some major US banks fell around 1%.
The MSCI world equity index, which tracks shares in 49 nations, lost 0.23%, while European stocks ended down 0.2%. Euro area unemployment data released on Tuesday came in below expectations.
US Treasury yields were marginally higher. The US Treasury sold $52 billion in three-year notes, picking up a high yield of 4.105%, lower than the market expected at the bid deadline, suggesting investors absorbed the note without a premium. In afternoon trading, the benchmark 10-year yield was slightly up at 4.017%.
The dollar rose 0.17% against the yen to 144.46. The euro was down 0.2% on the day at $1.0928, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up 0.2% at 102.51.
The dollar index hit a five-month low in December, with investors betting the Fed would cut rates sooner rather than later.
Oil prices climbed around 2% amid ongoing worries over the Middle East crisis. Brent crude futures settled $1.47, or 1.9%, higher at $77.59 a barrel, while US West Texas Intermediate crude ended $1.47, or 2.1%, higher at $72.24.
Key figures
Tokyo – Nikkei 225 > UP 2.01% at 34,441.72 (close)
Hong Kong – Hang Seng Index < DOWN 0.57% at 16,097.28 (close)
Shanghai – Composite < DOWN 0.54% at 2,877.70 (close)
London – FTSE 100 < DOWN 0.06% at 7,679.63 (0933 GMT)
New York – Dow < DOWN 0.42% at 37,525.16 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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