Asian markets slide as Japanese ‘tankan’ shows weaker outlook

TOKYO — Asian stocks were mostly down on Friday as a resurgence in Russian attacks dashed hopes for a quick end to the war in Ukraine.

The Japanese reference Nikkei 225 NIK,
-0.38%
slipped 0.5% in morning trading.

Shares in electronics and energy giant Toshiba Corp. 6502,
+5.48%
jumped 6.7% on news that Bain Capital could make an offer to acquire the company and take it private. Toshiba said he was not involved in such discussions.

Kospi 180721 from South Korea,
-0.55%
lost 0.6% while the Australian S&P/ASX 200 XJO,
+0.10%
increased slightly by 0.1%. Hang Seng HSI from Hong Kong,
-0.72%
lost 0.8% and the Shanghai Composite SHCOMP,
+0.62%
added 0.6%. Benchmarks in Singapore STI,
+0.05%,
Taiwan Y9999,
-0.75%
and Indonesia JAKIDX,
-0.04%
decreased slightly.

Rising COVID cases in China add to concerns of a regional slowdown. Lockdown in Shanghai has entered its second phase of prolonged restrictions, while restrictions were lifted in hard-hit Jilin.

The retreat followed a broad decline on Wall Street, which closed its worst quarter since the pandemic hit two years ago.

A closely watched quarterly indicator of Japan’s business sector sentiment called “tankan”, produced by the Bank of Japan, found the benchmark indicator for major manufacturers fell for the first time in seven quarters, losing three points. of a survey in December to 14 points out of 17 points.

the war in ukrainetogether with supply chain disruptions from major manufacturers caused by COVID-19 related restrictions and growing concerns about inflation, especially soaring energy costs, are clouding the outlook for growth already fragile of the world’s third largest economy.

The war is the most important factor weighing on the markets, according to analysts. Ukrainian President Volodymyr Zelenskyy expressed pessimism about Russian intentions and said in his overnight video address to the nation that he expected the Russian offensive to continue for some time.

“As we head into the weekend break, optimism for a ceasefire in the geopolitical dispute continues to fade overnight,” said Yeap Jun Rong, market strategist at IG. in Singapore.

On Wall Street, a 3.6% gain for March failed to offset a dismal January and February that left US indexes lower for the year to date.

The S&P 500 SPX,
-1.57%
lost 1.6% to 4,530.41. Its loss since the beginning of the year is 4.9%. The Dow Jones Industrial Average DJIA,
-1.56%
also fell 1.6% to 34,678.35. The Nasdaq composite COMP,
-1.54%
fell 1.5% to 14,220.52. Both indexes also posted gains in March, largely thanks to a market rally in the two weeks leading up to this week.

Oil prices have fallen under President Joe Biden ordered the release of up to 1 million barrels of oil per nation day strategic oil reserve. The move to pump more oil into the market is part of an effort to control energy prices, which have risen nearly 40% globally this year.

The American reference crude CLK22,
-0.51%
fell 36 cents to $99.92 a barrel early Friday. It fell 7% on Thursday. Brent BRNK22,
-5.43%,
the international standard, lost 7 cents to $104.64 a barrel.

An overnight pullback slightly reduced the spike in oil prices amid The Russian invasion of Ukraine. The dispute has raised fears that the tightening of supply could only worsen the persistent inflation that threatens businesses and consumers around the world.

An inflation gauge closely watched by the US Federal Reserve jumped 6.4% in February from a year ago, marking the largest year-over-year increase since January 1982.

Energy prices have been a key factor in driving up inflation and Biden’s plan to release more oil into the system comes as little relief is expected from the OPEC oil cartel. The cartel and its allied oil producers, including Russia stick to a modest increase in the amount of crude they pump around the world, a step that supports higher prices.

Banks also fell along with bond yields, which led to lower interest rates on loans, making lending less profitable for banks. The 10-year Treasury yield slipped to 2.34% from 2.36% on Wednesday night. Bank of America fell 4.1%.

But in Asia early Friday, the 10-year Treasury yield rebounded to 2.39%.

Rising prices for everything from energy to food are a major concern for central banks, who are poised to raise interest rates to soften the impact.

Investors received a lukewarm update on the labor market on Thursday. More Americans applied for unemployment benefits last week, but layoffs remain at historic lows. Wall Street will get a fuller report on Friday when the Labor Department releases jobs data for March.

In currency trading, the US dollar USDJPY,
+0.68%
rose to 122.52 Japanese yen from 121.69 yen.

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