Posted on Wednesday, November 17, 2021 | 6:50 p.m.
Updated 11 minutes ago
TOKYO (AP) – Asian stocks fell mainly on Thursday after stock indexes fell on Wall Street.
Japan’s Nikkei 225 benchmark fell 0.7% to 29,490.53 early in the session. The Australian S & P / ASX 200 edged up 0.2% to 7,381.40, while South Korea’s Kospi slipped 0.6% to 2,944.52. Hong Kong’s Hang Seng fell 1.7% to 25,227.83. The Shanghai Composite lost 0.5% to 3,520.77.
Recent government data has shown that the coronavirus pandemic continues to hurt the Japanese economy. A shortage of chips and other parts necessary for the production of automobiles, one of the pillars of the world’s third-largest economy, is one reason.
Another factor is the damage to consumer spending from recent government measures to close restaurants early and open theaters to limited crowds. Japan has never had a lockdown but has periodically called for a “state of emergency” to curb the spread of infections.
Junichi Makino, chief economist at SMBC Nikko Securities, said the Japanese recovery that many initially planned to kick off this year may have to wait until fiscal 2022.
“But extreme pessimism is not necessary. Auto production will likely return to normal by the October-December quarter, ”he said.
Investors are also watching the Bank of Korea’s policy meeting scheduled for next week to see if the central bank will raise its key rate. Policy makers have hinted at such a move.
“Without a positive Wall Street lead overnight and a relatively calm day in terms of economic data, sentiments in the region could be on hold, potentially leading to sideways moves,” said Yeap Jun Rong, market strategist at IG in Singapore.
On Wall Street, the S&P 500 lost 12.23 points, or 0.3%, to 4,688.67 after fluctuating between a slight gain and a decline of 0.4%. It sits just 13.03 points below its all-time high set a week and a half ago.
The Dow Jones Industrial Average fell 211.17, or 0.6%, to 35,931.05, and the Nasdaq composite fell 52.28, or 0.3%, to 15,921.57.
A 4.7% drop for Visa was one of the heaviest weights in the market. It fell after Amazon said it would no longer accept Visa credit cards issued in the UK in a dispute over fees.
The majority of stocks in the S&P 500 also fell, while smaller stocks in the Russell 2000 Index fell even more, down 1.2%. But gains in some heavyweight titles helped soften the losses. Apple rose 1.6% and Tesla 3.3%. Because they are two of Wall Street’s most important stocks in terms of market value, their moves carry additional weight on the S&P 500.
Yields in the US government bond market, at the center of some of Wall Street’s most turbulent stocks recently, fell after a week of big gains. The 10-year Treasury yield fell to 1.59% from 1.63% on Wednesday night.
Short-term yields also eased, abandoning some of their recent rise. Higher-than-expected inflation across the economy last week prompted investors to raise their expectations of when the Federal Reserve would raise interest rates to their all-time low.
Stocks rose mainly in the past month, with companies largely reporting much higher summer profits than analysts had expected. Several major retailers joined the parade on Wednesday, including Lowe’s, Target and TJX, which operates TJ Maxx and Marshalls stores. But the reaction of the stock market has not been uniform.
TJX rose 5.8% after reporting higher than expected revenues and profits for the last quarter. Home improvement retailer Lowe’s edged up 0.4% as it raised its revenue forecast for the year following strong third quarter financial results.
But Target fell 4.7% even though it also reported better-than-expected earnings. The company said it made less profit on every dollar of sales in the quarter, compared to the previous year, as it was squeezed by rising costs of goods and the supply chain, among others.
Such pressures – and how they affect corporate results – are under the microscope as relatively high inflation continues to sweep the world. Many companies have warned that their profit margins could suffer due to supply chain issues and higher costs for everything from workers’ wages to raw materials.
A housing market report showed some of these pressures. Builders opened fewer homes last month than in September, contrary to economists’ growth expectations. This could be an indication that supply shortages and higher costs are slowing the industry. But the number of building permits has also increased more than expected, perhaps showing that home builders are seeing those pressures eventually ease.
In energy trading, benchmark US crude fell 72 cents to $ 77.64 a barrel. Brent crude, the international standard, fell 32 cents to $ 79.96 a barrel.
In currency trading, the recent stall in the dollar rally is helping to put Asian markets on a wait-and-see basis. The US dollar fell to 113.99 Japanese yen from 114.07 yen. The euro cost $ 1.1332, compared to $ 1.1319.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
AP Business Writers Damian J. Troise and Stan Choe contributed.