Asian Stocks Mainly Track Wall St Fall Amid Inflation Fears | Taiwan News

TOKYO (AP) – Asian stocks were mostly down on Wednesday, following a decline on Wall Street as investors weighed in on the latest quarterly earnings reports for large U.S. companies and data pointing to rising inflation.

Japan’s Nikkei 225 benchmark edged down 0.2% early in the session to 28,661.50. The Australian S & P / ASX 200 added 0.2% to 7,349.60. South Korea’s Kospi slipped 0.3% to 3,261.48. The Hong Kong Hang Seng fell 0.6% to 27,784.74, while the Shanghai Composite fell nearly 0.9% to 3,535.83.

“This backdrop of higher US inflation, a faster Fed rise and a stronger US dollar is not a good recipe for emerging Asia,” said Robert Carnell, chief executive officer. regional research Asia-Pacific at ING, referring to the US currency.

Another concern is the surge in coronavirus cases in Indonesia, Malaysia and Thailand, he said. South Korea is also seeing cases jump. He released data showing an improvement in the unemployment rate, but the numbers were collected before pandemic restrictions were tightened.

Parts of Japan are also seeing an increase in COVID-19 infections, stoking fears about the tens of thousands of athletes, dignitaries and others from some 200 countries entering the country for the Tokyo Olympics. Tokyo reports hundreds of new cases daily. Some experts say it could rise to thousands in the coming weeks as ‘bubble’ conditions for Olympians have been compromised, with staff and athletes testing positive for the virus. The Games open on July 23.

On Wall Street, the S&P 500 fell 0.4%, with most of the benchmark companies losing ground. Banks, industrials and businesses that depend on consumer spending accounted for a significant portion of the decline. Tech stocks held off the trend, helping to counter some of the larger decline. Small business stocks suffered some of the heaviest losses.

The pullback took major stock indexes slightly below record highs they set a day earlier. Treasury yields have increased.

Investors valued mixed quarterly earnings reports from Goldman Sachs, JPMorgan Chase, PepsiCo and other big companies. They also got another glimpse into how inflation continues to show up in the economy, as rapidly surging consumer demand and supply constraints translate into higher prices for consumer goods. consumption.

The latest report from the US Department of Labor showed another increase in consumer prices in June that surprised economists. Prices rose the most in 13 years, prolonging a wave of higher inflation that raised fears on Wall Street that the Fed would consider withdrawing its low interest rate policies and cutting its bond purchases earlier than planned.

Much of the increase in the prices of goods, such as used cars, is mainly related to increased demand and lack of supply. The prices of many items, such as lumber and other raw materials, go down or will fall as suppliers ramp up their operations, said Jamie Cox, managing partner of Harris Financial Group.

The S&P 500 lost 15.42 points to 4,369.21. The Dow Jones Industrial Average fell 0.3% to 34,888.79. The tech-rich Nasdaq slipped 0.4% to 14,677.65, while the Russell 2000 Small Business Index fell 1.9% to 2,238.86.

“You had reported incredible profits for the most recent quarter, but in some of the comments that were posted there were questions about, ‘OK, what about cost pressures going forward? Said Alan McKnight, Director of Investments at Regions Asset Management. “Then you associate that with today’s inflation report where we see another high impression.”

Investors are also tuned in for clues about how companies fared during the recovery and how they see the rest of the year unfolding.

Goldman Sachs fell 1.2% despite announcing the second-best quarterly profit in investment banking history. JPMorgan Chase fell 1.5% after giving investors a mixed report with solid earnings but falling income as interest rates fell in the past three months.

“Finances have had this real tailwind of rising rates,” McKnight said. “We have already taken that into account. Now it’s almost a ‘show me’ story. Can you really prove that you can generate income at a much higher rate once we get back to a more normalized environment? “

Conagra Brands slipped 5.4% for the biggest decline in the S&P 500 after the owner of Chef Boyardee’s and other packaged food brands gave investors weak financial forecasts, citing inflationary pressure. Fastenal, a manufacturer of industrial and construction fasteners, also said it expects increased pressure from inflation on product and transportation costs. The stock fell 1.6%.

Bond yields slipped to 1.40% from 1.42% on Tuesday night. Overall, yields followed a downward trend after rising sharply at the start of the year.

The calm in the bond market partly indicates greater confidence that the rise in inflation is likely to be temporary and mainly linked to the economic recovery.

Strong earnings have helped some companies to make gains. PepsiCo rose 2.3% after beating Wall Street earnings and revenue forecasts in the second quarter.

Boeing fell 4.2% after announcing production cuts for its large 787 airliner due to a new structural flaw in some planes that were built but not delivered to airline customers.

In energy trading, benchmark US crude fell 18 cents to $ 75.07 a barrel in electronic trading on the New York Mercantile Exchange. He earned $ 1.15 to $ 75.25 on Tuesday. Brent crude, the international standard, fell 12 cents to $ 76.37 a barrel.

In currency trading, the US dollar fell to 110.53 Japanese yen from 110.61 yen. The euro cost $ 1.1779, compared to $ 1.1774.


AP Business Writers Damian J. Troise and Alex Veiga contributed.

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