Asian stocks fall for second day after new Wall Street record

PTI Beijing | Updated on June 29, 2021

Investors eye US jobs data for pointers to inflation pressure

Asian stock markets declined for a second day on Tuesday as investors looked ahead to US employment data for indications of possible inflation pressures.

Market benchmarks in Shanghai, Tokyo and Hong Kong retreated.

Also read: Sensex down 122 points intraday, Nifty below 15,800, as metals and financials drag

Overnight, Wall Street’s benchmark S&P 500 index rose 0.2 per cent to a record as gains for Facebook, Nvidia and other tech stocks offset losses for other industries.

Investors are swinging between optimism about a global economic recovery underpinned by coronavirus vaccinations and worry that central banks might feel pressure to withdraw stimulus to cool rising inflation pressures.

Traders are watching US jobs data due out on Friday for signs of whether the labour market “will start to show initial signs of heating,” Anderson Alves of ActivTrades said in a report.

The Federal Reserve says it believes a rise in prices of oil and other commodities is temporary, but wage increases can be more lasting.

Also on Tuesday, the World Bank raised its forecast of China’s economic growth this year to 8.5 per cent from its April prediction of 8.1 per cent. The Washington-based lender said a full recovery requires progress in vaccinations against the coronavirus.

The Shanghai Composite Index fell 0.7 per cent to 3,579.73 and the Nikkei 225 in Tokyo shed 0.9 per cent to 28,801.05. The Hang Seng in Hong Kong lost 0.8 per cent to 29,024.63.

The Kospi in Seoul retreated 0.5 per cent to 3,285.62 and Sydney’s S&P-ASX 200 lost 0.1 per cent to 7,298.80.

India’s Sensex opened down 0.2 per cent at 52,624.43. Markets in New Zealand and Southeast Asia declined.

On Wall Street, the S&P 500 rose to 4,290.61 while the Dow Jones Industrial Average dropped 0.4% to 34,283.27.

The Nasdaq composite added 1 per cent to a record 14,500.51.

Nvidia jumped 5 per cent after The Sunday Times in Britain reported several big customers of UK semiconductor company Arm came out in support of its proposed takeover by Nvidia.

Facebook climbed 4.2 per cent after a federal judge dismissed antitrust lawsuits brought against it by the Federal Trade Commission and a group of state attorneys general. Apple rose 1.3 per cent, Microsoft gained 1.4 per cent and Intel climbed 2.8 per cent.

Stock prices look expensive to some investors after rising faster than corporate profits. Inflation remains a worry, even if more investors have come around to the Federal Reserve’s view that it will be only a temporary problem.

Economists expect Friday’s US jobs numbers to show employers added 700,000 more than they cut in June. That would be an acceleration following a couple months of disappointingly slow hiring. They also expect the report to show that average hourly earnings jumped 3.7 per cent in June from a year earlier.

In energy markets, benchmark US crude declined 18 cents to $72.73 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.14 to $72.91 on Monday. Brent crude, used to price international oils, shed 19 cents to $73.95 per barrel in London.

The dollar advanced to 110.57 yen from Monday’s 110.55 yen. The euro retreated to $1.1920 from $1.1923.

Published on June 29, 2021

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