Asia’s major stock indexes were made to work hard for their gains on Wednesday, lifted by hopes of significant stimulus coming from Beijing but with advances capped by caution over the gloomy global picture.
Overnight rises on Wall Street helped brighten the mood but poor trade data from China which saw the biggest fall in exports last month since January offset that optimism.
Japan’s Nikkei share average fell in its biggest decline in 12 weeks as investors turned cautious about its rally, while there were sell-offs ahead of the fixing of special quotation prices at the end of the week.
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The Nikkei index fell 1.82% to close at 31,913.74, posting its sharpest daily drop since March 14 to snap a four-day winning streak.
The index rose as much as 0.6% in early trade to track Wall Street higher overnight, after hitting its highest since July 1990 in the previous session. The broader Topix lost 1.34% to 2,206.30.
Chip-related stocks led the declines in the Nikkei, with Tokyo Electron and Advantest falling 4.18% and 3.79%, respectively.
China’s equity indexes gave up some gains after May’s poor trade data.
Chinese manufacturers struggled to find demand abroad and domestic consumption remained sluggish, but that raised expectations of help for the economy. Exports shrank much faster than expected in May and imports fell, albeit at a slower pace.
That news came a day after China reportedly asked its biggest banks to cut deposit rates to boost the economy. Speculation of policy support for the troubled property sector has been lifting those shares over the past week.
The benchmark Shanghai Composite Index was almost flat, rising 0.08%, or 2.42 points, to 3,197.76, while the Shenzhen Composite Index on China’s second exchange dropped 0.17%, or 3.34 points, to 1,995.28.
The Hang Seng Index gained 0.80%, or 152.72 points, to 19,252.00.
In earlier trade, there were also positives in Taipei, Manila and Mumbai while Seoul was flat, while Singapore, Sydney, Bangkok, Jakarta and Wellington struggled.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.6% by the late morning.
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European markets looked set to follow Asia’s cautious lead, with the pan-region Euro Stoxx 50 futures edging up by 0.23%. German DAX futures added 0.2%, while the FTSE futures were almost flat. U.S. stock futures, the S&P 500 e-minis , was up by 0.1%.
The US S&P 500 ended higher on Tuesday, gaining support from strengthening bets that the Federal Reserve will hold interest rates steady at its policy meeting next week.
The two-year Treasury yield, which typically moves in step with interest rate expectations, fell slightly to about 4.5% in Tokyo, from Tuesday’s close at 4.516%. The yield on 10-year notes slipped to around 3.67%.
The U.S. dollar index was almost flat at 104.09. The Australian dollar reached its highest since mid-May at $0.6690, extending a rally following a central bank rate increase on Tuesday.
Oil extended its losses as concern over global economic headwinds deepened, erasing gains booked after top crude exporter Saudi Arabia’s surprise weekend pledge to deepen output cuts.
Brent crude futures were down 40 cents, or 0.5%, at $75.89 a barrel at 0456 GMT. The US West Texas Intermediate crude futures fell 35 cents, also 0.5%, to $71.39 a barrel.
Leading cryptocurrency bitcoin was trading at about $27,000, consolidating after a sharp overnight rebound from as low as $25,350.
The token has been a paradoxical beneficiary of a US Securities and Exchange Commission (SEC) crackdown on cryptocurrency exchanges, and the classification of tokens including Solana, Cardano and Polygon as securities.
“The SEC is making life nearly impossible for several altcoins,” said Oanda senior market analyst Ed Moya. “And that is actually driving some crypto traders back into Bitcoin.”
Key figures
Tokyo – Nikkei 225 < DOWN 1.82% at 31,913.74 (close)
Hong Kong – Hang Seng Index > UP 0.80% at 19,252.00 (close)
Shanghai – Composite > UP 0.08% at 3,197.76 (close)
London – FTSE 100 < DOWN 0.02% at 7,626.28 (0934 GMT)
New York – Dow > UP 0.03% at 33,573.28 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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