Tokyo, June 8 (BNA): Asian stocks fell on Thursday after heavy selling in big-name technology stocks pushed benchmark indices lower on Wall Street.
Markets fell across the region and US futures fell as well. Oil prices fell.
The declines came despite a sharp upward revision in Japan’s expected economic growth rate in the January-March quarter, to 2.7%. That was higher than analysts had expected, according to the Associated Press (AP).
Japan’s Nikkei 225 index fell 1.3 percent to 31,517.45. Australia’s S&P/ASX 200 fell 0.2% to 7,105.30. South Korea’s Kospi index fell 0.6 percent to 2,599.49.
Hong Kong’s Hang Seng Index fell 0.4% to 19,177.52 points. The Shanghai Composite Index lost 0.1%, to 3,193.86.
Taiwan’s Taiex lost 1.1%, while India’s Sensex rose 0.1%.
On Wednesday, US stocks drifted to a mixed close as declines in Microsoft and other technology stocks overshadowed gains in most of the rest of the market. It’s a reversal from most of this year, when excitement about artificial intelligence and hopes of an end to rising interest rates buoyed the tech sector.
The Japanese economy has been recovering since the lifting of restrictions related to the coronavirus pandemic. The nation has seen a return of tourists, as well as other economic activities.
The focus now is on when the BoJ may move away from the easy monetary policy it has held for years. In the past year, the US Federal Reserve and other central banks in the world have raised interest rates. The standard interest rate in Japan is 0.1%.
“While a higher growth reading may provide some room to consider a policy exit from the Bank of Japan, the central bank’s stance could remain unaffected for the time being, as recent comments from Governor Kazuo Ueda suggest more wait-and-see,” Yeap analyst John Rong said. Market in IG’s report.
On Wall Street, the S&P 500 fell 0.4% to 4,267.52 even though the majority of stocks within the index rose. The Dow Jones Industrial Average rose 0.3% to 33665.02, while the Nasdaq Composite fell 1.3% to 13104.89.
Microsoft, Amazon, Nvidia and Alphabet sank at least 3% and were the heaviest weights on the S&P 500. Since they are some of the most valuable stocks on Wall Street, their moves carry an additional impact on the index.
The Russell 2000 index of smaller stocks jumped 1.8%, extending its hot streak since a stronger-than-expected employment report last week suggested the recession could be further afield than expected.
The overall market has been rallying for months thanks to a resilient economy that has managed to defy expectations of a recession. But the threat still looms, and Wall Street is wondering which will come first: recession, or inflation falling enough to get the Fed to cut interest rates?
Most traders expect the Fed to leave interest rates steady next week. This will be the first policy meeting in more than a year where it did not raise the benchmark interest rate, which is at its highest level since 2007. But the Fed may resume raising interest rates in July.
The goal of higher interest rates is to eliminate high inflation by slowing down the entire economy and hurting the prices of stocks, bonds, and other investments. Higher interest rates put pressure on US banks and manufacturing, though the job market remained strong.
In the bond market, the yield on the 10-year Treasury rose to 3.78% from 3.68% late Tuesday. Helps determine rates for mortgages and other important loans. The two-year yield, which moves further based on Fed expectations, rose to 4.55% from 4.50%.
In energy trading on Thursday, US benchmark crude fell 19 cents to $72.34 a barrel in electronic trading on the New York Mercantile Exchange. It rose 79 cents to $72.53 on Wednesday. Brent crude, the international benchmark, fell 14 cents to $76.81 a barrel.
In currency trading, the US dollar fell to 139.73 yen from 140.10 yen. The price of the euro reached $1.0708, up from $1.0698.
HF