Asian stocks see pullback amid Wall Street and COVID worries

- Advertisement -


TOKYO (AP) – Asian shares plunged into cautious trading on Tuesday after Wall Street fell amid continuing concerns about rising cases, especially in China, the Omron coronavirus version.

- Advertisement -

Japan’s benchmark Nikkei 225 NIK,
-0.84%
It fell 0.8% to 28,242.46 in morning trade. Kospi 180721 of South Korea,
-0.10%
Little had changed at 2,926.01. Australia’s S&P/ASX 200 XJO,
-0.77%
fell 0.8% to 7,391.50. Hang Seng HSI of Hong Kong,
+0.21%
It closed 0.5% lower at 23,640.42, while the Shanghai Composite SCOMP,
-0.24%
fell less than 0.1% to 3,592.35.

- Advertisement -

Asian markets are also eyeing the US Federal Reserve, which is expected to reduce interest rates this year. What happens in China is also likely to have regional implications.

Major automakers, including automakers such as Toyota, were relying on improved supplies of semiconductor chips and other products from China and the rest of Asia, as vaccination and other coronavirus prevention efforts move forward. The recent surge in infections by Omicron has put a dent in such hopes.

- Advertisement -

“China continues to grapple with a sharp rise in COVID-19 cases, with restrictions in place to contain the spread ahead of the Winter Olympics in February. While it is still too early to say, the risk on the clock could be pricing pressure from any disruption in supply chains or a change in China’s zero-COVID approach,” said Yep Jun Rong, market strategist at IG in Singapore. said.

On Wall Street, the S&P 500 was down 2% early in a broad wave of selling, but buying in the late afternoon left the benchmark index down just 0.1%. The Dow Jones Industrial Average fell 0.5% after down 1.6%, and the tech-heavy Nasdaq gained less than 0.1% after being down 2.7%.

The latest pullback followed a sell-off last week as investors shifted holdings on hopes that the Federal Reserve would raise interest rates this year, among other moves aimed at easing inflation. Wall Street is trying to get a better reading of when and how much the Fed will raise rates.

“The market has been a bit shaken by all of this uncertainty,” said JJ Kinahan, chief strategist at TD Ameritrade. “I expect volatility to continue for the rest of the first quarter, at least as we continue to grapple with this question.”

The S&P 500 fell 6.74 points to end at 4,670.29. The decline extended the index’s declining streak to five days. It is now down about 2.6% from its highs a week ago.

After losing 591 points in the opening round, the Dow fell 162.79 points to 26,068.87. The Nasdaq rose 6.93 points to 14,942.83, breaking a four-day losing streak. Shares of smaller companies also declined. The Russell 2000 fell 8.66 points, or 0.4%, to 2,171.15.

The sell-off began to lose momentum as Treasury yield growth eased. The 10-year Treasury briefly hit 1.84% before slipping back to 1.76% by late afternoon. The match where the produce was late Friday night.

In the beginning, when bond yields were rising, technology stocks were the biggest pressure on the S&P 500. Higher interest rates make stocks of expensive tech companies and other priced growth companies less attractive to investors, which is why the sector is as slippery as bonds. increase in yield. The tech sector has been the biggest load on the market during January and is coming off its worst week since October 2020.

Large technology stocks have a major influence on the S&P 500 because of their sheer size. Coming into the year, the technology sector represented 29.2% of the S&P 500.

Higher interest rates could help control high inflation world-wide, but they would also eliminate conditions that have put financial markets into “easing mode” for many investors since the beginning of 2020. The Fed has said it will accelerate the reduction. Its bond purchases, which have helped keep interest rates low. The market is now likely to raise the Fed’s short-term rates by at least a quarter point in March to around 78%. It was around 36 per cent a month ago.

A mix of companies that rely on industrial stocks, banks and consumer spending was a big part of the S&P 500’s decline on Monday. Those losses were offset by gains in health care, technology and communications stocks.

A mix of deal news and financial updates moved many large stocks.

Take-Two Interactive, the maker of “Grand Theft Auto,” fell 13.1% for the biggest drop in the S&P 500 after announcing a deal to buy Zynga, which makes “Words With Friends” and “Farmville.” Zynga jumped 40.7%.

Athletic apparel maker Lululemon Athletica fell 1.9% after warning investors that a surge in virus cases hurt its fourth-quarter financial results. Medical product maker and distributor Cardinal Health fell 5.9% after it said supply chain problems would hurt its medical segment’s profits.

Investors have had a busy week of economic reports and corporate earnings.

The Labor Department will issue an update Wednesday on how inflation is affecting prices, along with the consumer price index for December. The agency will release details on how inflation is affecting businesses, along with its producer price index for December, on Thursday.

On Friday, Citigroup, JPMorgan Chase and Wells Fargo will report their latest quarterly financial results.

US benchmark crude rose 50 cents to $78.73 a barrel in energy trading. International benchmark Brent crude rose 45 cents to $81.32 a barrel.

In currency trading, the US Dollar rose from $115.21 to $115.34. The price of the euro increased from $1.1336 to $1.1336.

,

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox