Share-Market
Japan shares rise after election, rest of region declines
Asian shares were mostly lower on Monday, although Japan’s benchmark rallied, welcoming a landslide parliamentary election victory by the ruling Liberal Democratic Party.
Concerns about global inflation and interruptions to economic activity brought on by the coronavirus pandemic are adversely affecting investor sentiment.
The tide may be shifting as more and more market players focus on the economic outlook, Stephen Innes of SPI Asset Management said in a commentary.
“A recession is not the market’s base outlook, but until proven otherwise, investors will debate the depth of the growth hit, not the likelihood of recession; thus, good economic data is good news for stocks,” he said.
Japan’s benchmark Nikkei jumped 1.1% in morning trading to 26,803.30.
Japan’s governing party and its coalition partner scored a major victory in balloting Sunday, which came two days after the assassination of former Prime Minister Shinzo Abe. Abe was shot by a man emerging from the crowd listening to his campaign speech, took out a homemade gun and fired.
The attack shocked a nation that rarely sees gun violence. The Liberal Democratic Party was bound for victory even before the assassination, but some analysts said the shock of Abe’s death was likely to strengthen that trend.
With its partner Komeito party, the ruling coalition raised its combined share in the 248-seat upper house to 146. Prime Minister Fumio Kishida almost certainly stands to rule without interruption until a scheduled election in 2025, ensuring that the pro-U.S. defense and diplomatic policies of the late Abe and the Liberal Democrats will continue unchanged.
Read: Asia shares rise on optimism about easing COVID restrictions
Australia’s S&P/ASX 200 declined 0.6% to 6,638.20. South Korea’s Kospi lost 0.3% to 2,342.82.
Hong Kong’s Hang Seng slipped 2.7% to 21,144.53, while the Shanghai Composite fell 1.5% to 3,307.23. Technology shares fell after market regulators in China fined companies for not reporting past transactions as required.
Wall Street had a sputtering finish last week, as global markets turned their attention to Chinese economic indicators and moves by central banks, including the U.S. Federal Reserve, to contain stubbornly growing inflation.
The hotter the U.S. economy remains, the more likely the Federal Reserve is to continue raising interest rates.
A strong hiring report for June assuaged fears that the U.S. economy might be on the cusp of a recession — and highlighted the resilience of the nation’s job market.
Yet the figures the government released Friday also spotlighted the sharp divide between the healthy labor market and the rest of the economy: Inflation has soared to 40-year highs, consumers are increasingly gloomy, home sales and manufacturing are weakening and the economy might actually have shrunk for the past six months.
The Fed has already hiked its key overnight interest rate three times this year, and the increases have become increasingly aggressive. Last month it raised rates by the sharpest degree since 1994, by three-quarters of a percentage point to a range of 1.50% to 1.75%. It was at virtually zero as recently as March.
Other central banks around the world are also raising interest rates and removing emergency plans put in place early in the pandemic to prop up financial markets.
On Friday, the S&P 500 dropped 0.1% to 3,899.38, snapping a four-day winning streak. The Dow fell 0.1% to 31,388.15, while the Nasdaq rose 0.1% to 11,635.31. The Russell 2000 index of small company stocks slipped less than 0.1%, to 1,769.36.
In energy trading, U.S. benchmark crude lost 79 cents to $104.00 a barrel. It gained $2.06 to $104.79 a barrel on Friday.
Brent crude, the international standard, fell 74 cents to $106.28 a barrel.
In currency trading, the U.S. dollar gained to 137.03 Japanese yen from 136.10 yen. The euro cost $1.0148, down from $1.0182.
Asia shares rise on optimism about easing COVID restrictions
Asian shares advanced Monday across the board as buying set in after the lull of a U.S. national holiday.
Analysts said the optimism may be driven by expectations the U.S. may decide to cut Chinese tariffs, a welcome move that would also help tame inflation.
China’s Commerce Ministry said Tuesday that Vice Premier Liu He spoke with Treasury Secretary Janet Yellen about coordinating economic policy between the two biggest economies and maintaining the stability of supply chains.
In a statement, it also said the Chinese side “expressed its concern over issues such as the removal of additional tariffs and sanctions imposed by the United States on China and fair treatment of Chinese companies.” The two sides agreed to continue their discussions, it said.
Investors also have been encouraged by the lifting of restrictions related to the coronavirus pandemic across the region, including in Japan, which had been booming with tourists from abroad ahead of the pandemic.
“The quiet economic calendar yesterday brings sentiments to focus on the single relief headline of a potential US tariff-easing decision, which could run the risks of a sharp paring back in speculative bullish bets in the event of any inaction,” in taming inflation,” Yeap Jun Rong, a market strategist at IG in Singapore, said in a commentary.
But risks remain because of inflation and slowing economic activity in some countries. A resurgence in COVID-19 infections in Europe, the U.S. and parts of Asia is also looming, bringing the threat of a reversion to pandemic precautions.
Japan’s benchmark Nikkei 225 added nearly 1.0% in morning trading to 26,404.90. Australia’s S&P/ASX 200 rose 0.3% to 6,632.00. South Korea’s Kospi jumped 1.8% to 2,342.24. Hong Kong’s Hang Seng gained 0.8% to 21,997.04, while the Shanghai Composite inched up 0.1% to 3,409.95.
Market players are also closely watching for an interest rate decision by the Reserve Bank of Australia. It is expected to raise its key rate by 50 basis-points. Minutes of the latest policy meeting of the Federal Reserve are also due out on Wednesday and could bring hints on future policy.
Read: Asian shares gain as investors shrug off downbeat data
Global investors have been worried about surging inflation and the possibility that higher interest rates could bring on a recession in some economies. U.S. trading was closed Monday for Independence Day.
The futures for the Dow industrials and the S&P 500 were both up 0.4% early Tuesday.
Shares ended last week with a rally, with the S&P 500 surging 1.1%. The Dow gained 1% and the Nasdaq rose 0.9%. The Russell 2000 index of smaller companies gained 1.2%.
In the first half of this year, the S&P 500 had its worst performance since the first six months in 1970. It’s now down 20.2% from the peak it set at the beginning of this year.
The risk of a recession is simmering as the U.S. Federal Reserve aggressively hikes interest rates. The Fed is raising rates to purposefully slow economic growth to help cool inflation, but could potentially go too far and bring on a recession.
In Germany, Chancellor Olaf Scholz gathered top employer and labor union representatives at his Berlin office Monday to seek ways of addressing the impact of rising prices while preventing a spiral of inflation in Europe’s biggest economy.
In energy trading, benchmark U.S. crude surged $1.87 to $110.30 a barrel. It gained $2.67 on Friday to $108.43 a barrel. Trading was closed Monday. Brent crude, the international standard, lost 3 cents to $113.47 a barrel.
In currency trading, the U.S. dollar edged up to 136.15 Japanese yen from 135.69 yen. The euro cost $1.0434, up from $1.0423.
Asian shares gain as investors shrug off downbeat data
Shares were higher in Asia on Friday, despite data suggesting economies are slowing. The advance tracked gains on Wall Street, where the market is headed for its first weekly gain after three weeks of punishing losses.
Tokyo’s Nikkei 225 index added 1.2% to 26,491.97 and the Kospi in Seoul jumped 2.4% to 2,369.16. Hong Kong’s Hang Seng advanced 2% to 21,707.92 and the Shanghai Composite index added 1% to 3,354.63.
In Australia, the S&P/ASX 200 gained 0.8% to 6,577.40. Shares also rose in India and Taiwan.
U.S. and European futures also were higher.
Market players are looking ahead to U.S. inflation data due next week. They appeared to shrug off preliminary data showing a slowing of factory activity in several countries including Japan.
The manufacturing manager surveys of “several developed economies came in lower-than-expected in both the manufacturing and services sector, which points to a broad-based moderation in economic activities,” Jun Rong Yeap of IG said in a commentary.
A report Friday showed inflation in Japan remained at 2.1% in May, pushed higher by energy costs and a weaker currency. However, underlying core inflation, which excludes volatile costs for energy and fresh foods, remained at 0.8% and the central bank is unlikely to follow the example of the U.S. Federal Reserve and other central banks in raising interest rates, analysts said.
Also Read: Asian stock markets higher after Wall St sinks further
The Bank of Japan “isn’t convinced that this will be sustainable because wage growth remains soft and higher energy costs are weighing on corporate profits and consumer sentiment,” Marcel Thieliant of Capital Economics said in a report.
On Wall Street, trading was wobbly as investors focused on another round of testimony before Congress by Federal Reserve Chair Jerome Powell. He told a House committee the Fed hopes to rein in the worst inflation in four decades without knocking the economy into a recession, but acknowledged “that path has gotten more and more challenging.”
The S&P 500 ended 1% higher at 3,795.73 after having been down as much as 0.4%. The Dow Jones Industrial Average rose 0.6% to 30,677.36 and the Nasdaq gained 1.6% to 11,232.19.
Smaller company stocks also gained ground. The Russell 2000 rose 1.3% to 1,711.67.
Trading has been turbulent in recent weeks as investors try to determine whether a recession is looming. The benchmark S&P 500 is currently in a bear market. That means it has dropped more than 20% from its most recent high, which was in January. The index has fallen for 10 of the last 11 weeks.
On Thursday, Powell stressed: “I don’t think that a recession is inevitable.” He has said it’s ”certainly a possibility” and that the central bank is facing a more challenging task amid the war in Ukraine essentially pushing oil and other commodity prices even higher and making inflation even more pervasive.
Powell spoke to Congress a week after the Fed raised its benchmark interest rate by three quarters of a percentage point, its biggest hike in nearly three decades. Fed policymakers also forecast a more accelerated pace of rate hikes this year and next than they had predicted three months ago, with its key rate to reach 3.8% by the end of 2023. That would be its highest level in 15 years.
The Labor Department reported Thursday that fewer Americans applied for jobless benefits last week, though it was slightly more than economists expected. The solid job market is a relatively bright point in an otherwise weakening economy, with consumer sentiment and retail sales showing increasing damage from inflation.
As higher prices stretch pocketbooks, consumers are shifting spending from big ticket items like electronics to necessities. The pressure has been worsened by record-high gasoline prices that show no sign of abating.
Big technology and health care companies did much of the heavy lifting. Microsoft rose 2.3% and Johnson & Johnson rose 2.2%.
Energy stocks fell as the price of U.S. crude oil dropped 1.8%. Valero fell 7.6%.
Early Friday, U.S. benchmark crude oil was up 36 cents at $104.63 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis for pricing for international trading, shed 9 cents to $106.55 per barrel.
Bond yields fell significantly. The yield on the 10-year Treasury note, which helps set mortgage rates, fell to 3.09% from 3.15% late Wednesday.
The U.S. dollar fell to 134.73 Japanese yen from 134.94 yen. The euro rose to $1.0539 from $1.0524.
Wall Street points lower after two days of gains
Major U.S. markets slipped before the opening bell Wednesday as broad concerns about interest rates, inflation and the war in Ukraine continue to weigh on investors.
Futures for the Dow Jones industrials ticked down 0.4% and gave up 0.3% on the S&P 500. Most Asian markets finished in positive territory, mimicking U.S. gains Tuesday, while shares in Europe were in decline at midday.
“Equities are drifting lower as the broader narrative remains unchanged, with peak inflation optimism meeting increasingly hawkish pivots from central banks,” Stephen Innes of SPI Asset Management said in a commentary.
Britain’s FTSE 100 and Germany’s DAX both slipped 0.6%, while the CAC 40 in Paris shed 0.7%.
U.S. stocks gained for the second straight day Tuesday, even as the World Bank sharply cut its forecast for economic growth this year, highlighting Russia’s war against Ukraine and the possibility of food shortages and the potential return of “stagflation,” a toxic mix of high inflation and sluggish growth unseen for more than four decades.
Treasury Secretary Janet Yellen, testifying before the the Senate Finance Committee on Tuesday, said she expects inflation to remain elevated and bringing that down is a top priority.
More data on recent price swings arrives Friday when the U.S. reports its consumer price index, which excludes volatile food and energy prices.
Also Read: Asian stock markets higher after Wall St sinks further
The economy’s fragility has been atop Wall Street’s mind this year amid worries about interest-rate hikes coming from the Federal Reserve. The central bank is moving aggressively to stamp out the worst inflation in decades, but it risks choking off the economy if it moves too far or too quickly.
The Fed is widely expected to raise its key short-term interest rate by half a percentage point at its meeting next week. That would be the second straight increase of double the usual amount, and investors expect a third in July.
Treasury yields have largely climbed through this year with expectations for a more aggressive Fed. They moderated a bit on Tuesday, though.
The yield on the 10-year Treasury held just above 3% at 3.01% early Wednesday. The two-year yield, which more closely tracks expectations for Fed action, inched up to 2.75% from 2.73%.
The next big update on inflation arrives Friday, when the U.S. government releases its latest reading on the consumer price index.
In Asian trading, Hong Kong shares surged 2.2% to 22,014.59 on heavy buying of shares in Chinese technology companies after Beijing approved a new batch of video games. That was seen as a sign the business outlook for tech companies is improving after a prolonged regulatory crackdown.
Tokyo’s Nikkei 225 gained 1% to 28,234.29 after Japan reported its economy contracted at a lower pace than earlier reported in the January-March quarter, shrinking 0.5% instead of 1%. The latest data showed consumer spending was not as weak as earlier thought.
In India, the Sensex lost 0.4% to 54,905.16 after the Reserve Bank of India raised its key interest rate by 0.5 basis points to 4.9%.
The Kospi in South Korea was little changed at 2,626.15. In Sydney, the S&P/ASX 200 advanced 0.4% to 7,121.10. The Shanghai Composite index reversed early losses, gaining 0.7% to 3,263.79.
In other trading, benchmark U.S. crude oil added $1.12 to $120.53 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the standard for international trading, picked up $1.04 to $121.61 per barrel.
The U.S. dollar traded at 134.03 Japanese yen, up from 132.61 yen. The euro ticked up to $1.0736 from $1.0705.
END/AP/UNB
Global stock markets mixed after Wall St bond sell-off
Global stock markets were mixed Tuesday after a bond sell-off on Wall Street fueled anxiety about a possible U.S. economic slowdown and Australia raised interest rates.
London, Shanghai and Hong Kong declined. Frankfurt opened higher and Tokyo gained.
The yen, trading at two-decade lows, fell further to almost 133 to the dollar.
Wall Street futures were lower after the benchmark S&P 500 index rose 0.3% on Monday and the market price of a 10-year Treasury bond fell. That increased its yield, or the difference between the day’s price and the payout at maturity.
The difference between short- and long-term Treasury yields is narrowing, which is “making me a little nervous,” because it suggests investors think a U.S. recession is more likely, said Jeffrey Halley of Oanda in a report.
“I don’t think the U.S. is at stagflation yet,” or a period with high inflation and low growth, “but if oil stays above $120.00 a barrel, it might soon be,” Halley said.
Also Read: Asian stock markets higher after Wall St sinks further
In early trading, the FTSE 100 in London lost 0.2% to 7,595.92 while Frankfurt’s DAX gained 1.3% to 14,653.82. The CAC in Paris added 1% to 6,548.78.
Markets are swinging between gains and losses as investors weigh evidence about whether the Federal Reserve;’s interest rate hikes can cool inflation that is running at a four-decade high without tipping the U.S. economy into recession.
On Wall Street, the S&P 500 future was off 0.6% and that for the Dow Jones Industrial Average lost 0.5%.
On Monday, the Dow edged up less than 0.1%. The Nasdaq composite gained 0.4% to 12,061.37.
The yield on the 10-year Treasury, or the difference between the market price and the payout if held to maturity, jumped back above 3% to 3.04%, up from 2.95% late Friday.
The Treasury yield is moving toward its levels from early and mid-May. Then, it reached its highest point since 2018 amid expectations for the Federal Reserve to raise interest rates aggressively.
Bond buyers usually want a higher payout in exchange for tying up their money for longer periods. A flattening of the yield curve, or the long-term payout falling to match short-term bonds, is seen as an indicator of a possible recession because it shows investors expect economic conditions to be worse than they are now.
In Asia, the Shanghai Composite Index lost less than 0.1% to 3,234.77 after Chinese authorities further eased anti-virus restrictions that shut down businesses in Shanghai and other major cities.
The Nikkei 225 in Tokyo gained 0.1% to 27,943.95 while the Hang Seng in Hong Kong shed 0.8% to 21,481.75.
Sydney’s S&P-ASX 200 sank 1.6% to 7,091.50 after the Australian central bank raised a key interest rate by 0.5 percentage points, its biggest margin in 22 years, to cool inflation that is at a two-decade high.
The Kospi in Seoul tumbled 1.6% to 2,628.88 and India’s Sensex fell 1.2% to 54,992.34. New Zealand and Singapore declined while Jakarta advanced.
In currency markets, the yen fell to 132.91 to the dollar from Monday’s 132.01.
The yen has weakened because Japanese interest rates have stayed near record lows while U.S. and European rates rise. That helps Japanese exporters making their goods cheaper abroad but pushes up prices of imports for consumers and manufacturers.
Asian shares’ rise broadly cheered by US earnings, rally
Asian shares gained Friday as investors cheered a strong set of earnings from retailers that has sent U.S. shares higher.
Benchmarks were rising in early trading across the region, including Japan, China, Australia and South Korea.
“Improved risk sentiments in Wall Street, along with earnings outperformance from Alibaba and Baidu, may aid to fuel some upside for the Asia region into today’s session,” said Yeap Jun Rong, market strategist at IG in Singapore.
Shares of Alibaba and Baidu have surged after they reported better than expected results, easing some concerns about the negative impact from restrictions to curb COVID-19 infections. Both shares continued to rise in early trading.
Also Read: Asian stock markets higher after Wall St sinks further
Gauging Japan’s economic path will be on investors’ minds as data on manufacturing, housing and employment for April are set to be released next week. Some analysts expect the numbers to be dim because of a slowdown in exports to China during that period. But some optimism is also in the air, with Tokyo’s restrictions on tourists easing and the daily cap raising from 10,000 incoming people to 20,000 starting June 1. The Japanese government, led by Prime Minister Fumio Kishida, is also set to push ahead in parliamentary discussions with a supplementary budget, another possible plus for investors.
Japan’s benchmark Nikkei 225 added 0.8% in early trading to 26,811.06. Australia’s S&P/ASX 200 gained 0.9% to 7,167.70. South Korea’s Kospi jumped 1.0% to 2,638.92. Hong Kong’s Hang Seng surged 2.8% to 20,687.39, while the Shanghai Composite edged up 0.6% to 3,141.15.
Wall Street ended broadly higher after seven straight weeks of declines, the longest such stretch since 2001.
Bond yields rose. The yield on the 10-year Treasury, which helps set interest rates on mortgages, rose to 2.75% from 2.74% late Wednesday.
Roughly 90% of the stocks in the S&P 500 rose, with technology companies, banks and retailers driving much of the rally. While trading has remained choppy this week, the market has mostly pushed higher, unlike the past five weeks, when the S&P 500 had a pullback of 2% or more at least one day each week.
“It’s nice to see a couple days in the green, and this might actually end up being the first week when we don’t have a humongous down day,” said Liz Young, head of investment strategy at SoFi. “But I wouldn’t declare premature victory and assume we’re in the clear.”
The S&P 500 rose 79.11 points, or 2%, to 4,057.84. The Dow added 516.91 points, or 1.6%, to 32,637.19, and the Nasdaq rose 305.91 points, or 2.7%, to 11,740.65. The Russell 2000 index of smaller companies climbed 39.07 points, or 2.2%, to 1,838.24.
Retailers led the broader market higher Thursday. Macy’s surged 19.3% after it raised its profit forecast for the year following a strong first-quarter financial report. Dollar General vaulted 13.7% and Dollar Tree jumped 21.9% for the biggest gain in the S&P 500 after the discount retailers reported solid earnings and gave investors encouraging forecasts.
The retail sector is being closely watched by investors looking for more details on just how much pain inflation is inflicting on companies and consumers. Weak reports from the several big companies last week, including Target and Walmart, spooked an already volatile market.
“We’re not convinced that we’re completely out of the woods here,” said Philip Orlando, chief equity market strategist at Federated Hermes. “There were a lot of negative reports last week and what those companies have talked about is what is going on through the economy.”
Inflation is at a four-decade high and businesses have been raising prices on everything from food to clothing to offset higher costs. The impact from Russia’s invasion of Ukraine worsened inflation pressures by fueling higher energy and key food commodity costs. Supply chain problems worsened in the wake of China’s lockdown for several major cities as it tried to contain COVID-19 cases.
Consumers have been resilient about spending, but the pressure from inflation remains persistent and could be prompting a pullback or shift in spending from more expensive things to necessities.
The broad gains on Thursday followed a late push for markets on Wednesday prompted by details from the Federal Reserve’s latest meeting, which confirmed expectations of more interest rate hikes.
Technology stocks also rose. TurboTax maker Intuit rose 4.6%. Companies in the sector, with their lofty stock values, tend to push the market harder up or down.
Airline stocks rallied on encouraging summer travel forecasts. Southwest Airlines rose 6% and JetBlue rose 3.4%.
In energy trading, U.S. benchmark crude added 36 cents to $114.45 a barrel. U.S. crude oil prices rose 3.4% Thursday, and are up more than 55% for the year. Brent crude, the international standard, rose 45 cents to $117.85 a barrel.
In currency trading, the U.S. dollar inched down to 126.79 Japanese yen from 127.10 yen. The euro cost $1.0763, up from $1.0733.
World stocks lower after Fed confirms rate hike plans
Major global stock markets were mostly lower Thursday after notes from the Federal Reserve’s latest meeting confirmed expectations of more interest rate hikes but held no surprises to rattle investors.
London, Tokyo, Hong Kong and Sydney declined. Frankfurt and Shanghai gained. Oil prices rose.
Investors are uneasy over the impact of interest rate hikes in the United States and other Western economies to cool surging inflation. Wednesday’s Fed release showed board members support 0.5-percentage-point hikes at their next two meetings. That will weigh on economic activity but already was factored into stock prices.
There were no “hawkish or dovish surprises” or mentions of a bigger increase, Anderson Alves of ActivTrades said in a report.
In early trading, the FTSE 100 in London lost 0.1% to 7,516.42 while Frankfurt’s DAX gained 0.4% to 14,057.88. The CAC in Paris advanced 0.3% to 6,320.42.
On Wall Street, the future for the benchmark S&P 500 index was off 0.1% and that for the Dow Jones Industrial Average was little-changed.
Also Read: Asian stock markets higher after Wall St sinks further
On Wednesday, the S&P 500 index rose 0.9% after from this month’s Fed meeting showed board members agreed half-point rate hikes “would likely be appropriate.” That would be double the usual margin of increases.
In Asia, the Shanghai Composite Index gained 0.5% to 3,123.11 while the Nikkei 225 in Tokyo lost 0.3% to 26,604.84. The Hang Seng in Hong Kong sank 0.3% to 20,116.20.
The Kospi in Seoul declined 0.2% to 2,612.45 after the South Korean central bank raised its benchmark interest rate by 0.25 percentage points to 1.75%.
“With price pressures set to remain elevated in the near term, we expect the Bank to continue hiking in quick succession over the coming months,” Alex Holmes of Capital Economics said in a report.
Sydney’s S&P-ASX 200 ended 0.7% lower at 7,105.90.
India’s Sensex gained 0.8% to 54,173.63. New Zealand declined while Southeast Asian markets rose.
Investors also are worried about the impact of Russia’s February invasion of Ukraine and an unexpectedly sharp Chinese economic slowdown.
They hope the Fed can cool inflation that is running at a four-decade high without tipping the biggest global economy into recession.
The Fed raised its key interest rate by 0.5 percentage points at its May meeting in its most aggressive move in two decades. It indicated more hikes were to come.
The S&P 500 is coming off of a seven-week series of declines that came close to ending the bull market for stocks that began in March 2020.
In energy markets, benchmark U.S. crude 70 cents to $111.03 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oils, gained 43 cents to $111.55 per barrel in London.
Asian stock markets higher after Wall St sinks further
Asian stock markets gained Wednesday after Wall Street sank on weak U.S. housing sales and a profit warning by a prominent social media brand.
Shanghai, Hong Kong and Seoul advanced while Tokyo declined. Oil prices rose more than $1 per barrel to stay above $110.
Wall Street’s benchmark S&P 500 index lost 0.8% after the profit warning Tuesday by Snapchat’s parent company. Spooked investors dumped social media stocks. Construction stocks fell after U.S. home sales plunged in April.
“The overall mood in equity markets remains largely downbeat,” Jun Rong Yeap of IG said in a report.
The Shanghai Composite Index advanced 0.8% to 3,094.88 while the Nikkei 225 in Tokyo shed less than 0.1% to 26,729.70. The Hang Seng in Hong Kong gained 0.5% to 20,216.79.
The Kospi in Seoul rose 0.8% to 2,626.90 and Sydney’s S&P-ASX 200 added 0.7% to 7,177.80.
India’s Sensex opened up less than 0.1% at 54,099.64. New Zealand, Singapore and Jakarta declined while Bangkok advanced.
Also Read: Stock markets continue to fall on the third day Tuesday
Investors are on edge about the impact of interest rate hikes in the United States and other Western economies to cool surging inflation, as well as Russia’s war on Ukraine and a Chinese economic slowdown.
On Wednesday, the Federal Reserve is due to give insight into its decision-making by releasing minutes of its latest policy meeting.
On Wall Street, the S&P 500 on Tuesday fell to 3,941.48. The Dow Jones Industrial Average gained 0.2% to 31,928.62.
The S&P is down 18% from its Jan. 3 high, putting it on the brink of a bear market, or a 20% decline from the previous top.
The Nasdaq composite, dominated by tech stocks, slide 2.3% to 11,264.45 after the social media selloff. Snap plummeted 43.1%, its biggest single-day drop ever. Facebook parent Meta slumped 7.6%. Google’s parent fell 5.1%.
Retailers and companies that rely on direct consumer spending declined. Amazon slid 3.2% and Target fell 2.6%.
The pullback undercut the previous day’s broad rally.
Homebuilders slumped following a government report showing that April sales of newly built homes plunged 26.9% from a year earlier. KB Home fell 2.7%.
Cruise lines and other travel-related companies took heavy losses. Carnival slid 10.3% and Norwegian Cruise Line fell 12%.
In energy markets, benchmark U.S. crude rose $1.35 to $111.12 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 52 cents on Tuesday to $109.77. Brent crude, the price basis for international oil trading, advanced $1.32 to $112.01 per barrel in London. It rose 14 cents the previous session to $113.56.
The dollar gained to 126.99 yen from Tuesday’s 126.82 yen. The euro rose to $1.0709 from $1.0693.
Finance minister directs regulators to boost investment in stock market
Finance Minister AHM Mustafa Kamal at a meeting with Bangladesh Bank (BB) governor Fazle Kabir and other senior officials of the ministry asked them to work for boosting stock market investment.
He said the economy of Bangladesh stands on a strong base and growth position is very positive, but the unstable situation of the stock market is not acceptable.
Also read: Finance minister directs regulators to boost investment in stock market
Despite the Russia-Ukraine war and Covid-19 pandemic the economic growth of Bangladesh will continue, he said.
Kamal on Sunday gave several directives to the BB and Bangladesh Security and Exchange Commission (BSEC) for immediate implementation to boost the stock market
In order to attract capital in the market, state-owned investment institution ICB has been instructed to keep the bank's investment outside the investment limit or exposure limit of this institution in the capital market.
It has also been decided to double the size of the Tk150-crore funds given to the ICB for small investors, which had expired.
Also read:Finance minister hints at hard decisions due to Russia-Ukraine war
The finance minister asked for increased tenure of the funds along with doubling the funds’ size. The investments will be made from this fund from Monday, the finance ministry sources said.
Finance Secretary Abdur Rauf Talukder and Secretary of Financial Institutions Division Sheikh Mohammad Salim Ullah were also present at the meeting.
World shares sink after inflation driven retreat on Wall St
Shares declined in Europe and Asia on Thursday after a broad retreat on Wall Street triggered by worries over the impact of persistent high inflation on corporate profits and consumer spending.
U.S. futures were lower, while oil prices advanced.
Germany’s DAX lost 2% to 13,731.64 and the CAC 40 in Paris declined 1.9% to 6,234.78. Britain’s FTSE 100 shed 1.7% to 3,537.99. The future for the S&P 500 was 1% lower while the future for the Dow Jones Industrial Average sank 0.9%.
The Dow industrials sank more than 1,100 points, or 3.6% on Wednesday, and the S&P 500 had its biggest drop in nearly two years, shedding 4%. That was its steepest decline since June 2020. The tech-heavy Nasdaq fell 4.7%.
The benchmark index is now down more than 18% from the record high it reached at the beginning of the year. That’s just shy of the 20% decline that’s considered a bear market.
“The sentiment in the market is highly negative as traders and investors are largely concerned about an economic downturn and soaring inflation,” Naeem Aslam of Avatrade said in a commentary.
The Federal Reserve is trying to temper the impact from the highest inflation in four decades by raising interest rates. Many other central banks are on a similar track. But the Bank of Japan has stuck to its low interest rate policy and the gap between those benchmark rates of the world’s largest and third-largest economies has pushed the dollar’s value up against the Japanese yen.
Japan reported a trade deficit for April as its imports ballooned 28%. The shift reflects surging energy costs amid the war in Ukraine and a weakening of the yen against the U.S. dollar.
Japan’s exports grew to 8.076 trillion yen ($63 billion) last month, up 12.5% from the previous year, according to Ministry of Finance data released Thursday. Imports totaled 8.915 trillion yen ($70 billion) in April, up from 6.953 trillion yen in April 2021, and the highest since comparable numbers began to be taken in 1979.
The Nikkei 225 in Tokyo lost 1.9% to 26,402.84 and the Hang Seng in Hong Kong dropped 2.5% to 20,120.60. In South Korea, the Kospi shed 1.3% to 2,592.34, while Australia’s S&P/ASX 200 gave up 1.7% to 7,064.50.
Also Read: Asian shares fall amid interest rate, earnings worries
The Shanghai Composite index reversed earlier losses, gaining 0.4% to 3.096.96.
On Wednesday, retailer Target lost a quarter of its value after reporting earnings that fell far short of analysts’ forecasts. Inflation, especially for shipping costs, dragged its operating margin for the first quarter to 5.3%. It had been expecting 8% or higher.
The company warned that its costs for freight this year would be $1 billion higher than it estimated just three months ago.
The report comes a day after Walmart said its profit took a hit from higher costs. The nation’s largest retailer fell 6.8%, adding to its losses from Tuesday.
Target and Walmart each provided anecdotal evidence that inflation is weighing on consumers, saying they held back on purchasing big-ticket items and changed from national brands to less expensive store brands.
The weak reports stoked concerns that stubbornly rising inflation is putting a tighter squeeze on a wide range of businesses and could cut deeper into their profits.
Other big retailers also have racked up hefty losses.
The data are not entirely consistent. On Tuesday, the market cheered an encouraging report from the Commerce Department that showed retail sales rose in April, driven by higher sales of cars, electronics, and more spending at restaurants.
Investors worry the Fed could trigger a recession if it raises interest rates too high or too quickly. Worries persist about global growth as Russia’s invasion of Ukraine puts even more pressure on prices for oil and food while lockdowns in China to stem COVID-19 cases worsens supply chain problems.
In other trading, benchmark U.S. crude oil rose 56 cents to $110.15 per barrel in electronic trading on the New York Mercantile Exchange. It dropped $2.81 to $109.59 on Wednesday.
Brent crude, the basis for pricing for international trading, climbed $1.19 to $110.30 per barrel.
The dollar fell to 128.14 Japanese yen from 128.20 yen late Wednesday. The euro strengthened to $1.0481 from $1.0464.