Asian Shares Tracked Wall Street Drop
Wall Street shares settled in a negative territory due to the fear of inflation. The Dow Jones decreased by 0.31%, S&P 500 lost 0.35%, and the Nasdaq yielded 0.38%.
South Korean shares lost 0.20% due to worries about inflation and a record rise in coronavirus cases. Nikkei lost 0.38%.
Hang Seng slipped by 0.63% on worries about slowed China’s growth.
European shares dropped amid inflation worries. STOXX 600 lost 0.3%.
Wall Street Closes in Red Due to Inflation Worries
Wall Street stocks finished in the red on Tuesday after two consecutive days of record highs. The Dow Jones decreased by 0.31% or 107.39 points, to 34,888.79. The selective S&P 500 lost 0.35% or 15.42 points, to 4,369.21. Meanwhile, the Nasdaq composite index yielded 0.38% or 55.59 points, to 14,677.25.
The stock market declined following the announcement of the US consumer price index, which stood at 5.4% year-on-year in June. A faster than expected rise of the CPI in June added further pressure to the Fed’s view that increasing prices would ease into the beginning of next year.
FactSet analysts’ survey showed that profits for S&P 500 companies are expected to have risen 64% in Q2 compared to the same period last year.
Corporate earnings reports
Big US companies published earnings reports on Tuesday. JPMorgan Chase, the biggest bank in the country, PepsiCo or Goldman Sachs, exceeded analysts’ expectations.
JP Morgan reported profits of $26.248 million in the first half of the year. Goldman Sachs earned $12,322 million in the first half of the year, a 677% increase compared to the previous year. As for PepsiCo, its revenue increased by 20.5% from 2020.
At the close of the trading session, JPMorgan Chase shares dropped by 1.49%, Goldman Sachs lost 1.19%, while PepsiCo shares increased by 2.31%.
All sectors dropped except technology which posted a rise of 0.39%. Real estate led losses, decreasing by 1.27%. Meanwhile, non-essential goods lost 1.14%, financial yielded 0,97%, and raw materials sank by 0.96%.
Among the Dow Jones stocks, Dow Jones Visa led the gains with a rise of 1.78%. It was followed by Microsoft, adding 1.19%. At the same time, Coca-Cola raised by 1.05%. Meanwhile, Boeing was the biggest loser of the day, sinking by 4,2%. Caterpillar also lost a significant 1.55%, and Home Depot yielded 1.48%.
Kospi Slips on Record Rise in Covid-19 and Inflation
South Korean shares declined on Wednesday after inflation in the US hit 13-year highs. On the other hand, daily coronavirus cases in the country hit record highs, which also weighed on the stock market.
Kospi lost 0.20%, or 6.57 points, to 3,264.81. The benchmark hit the daily low of 3250.45 points, down by 0.6%.
The country reported 1,615 new cases compared to the previous day, with the total confirmed cases reaching 171,911.
Eleven of the nineteen significant stocks fell. The sea, land, and air transportation stocks dropped by 1.33%. They performed slightly better than the medical equipment stocks that lost 1.46%. As for South Korea shipping, it sank by 1.75 %.
Technology giant Samsung Electronics, which accounts for 20% of the market’s weight, dropped by 0.38%, while its rival SK Hynix advanced by 0.41%. Internet giant Naver added 0.68%.
The share price of Hansen Home Furnishings, a home furnishing company, closed with a rise of 24.68% to 146,500, setting a new closing high since April 16, 2018.
Samsung C&T grew 1.51% and was the only stock to rise more than 1%. Shinhan Finance and Korean entertainment giant CJ E&M, the promoter of Hallyu, sank by 2.15% and 2.78%, respectively.
Nikkei Fell by 0.38%
Tokyo stocks fell this Wednesday after the publication of a CPI in the US, which fuelled fears of a rapid rise in inflation. The data fueled investors’ fears that the Fed may withdraw the stimulus earlier than expected due to economic improvement. However, losses in Tokyo were limited.
The Nikkei plummeted by 0.38% or 109.75 points to 28,608.49.
The Topix lost 0.23% or 4.48 points to stand at 1,963.16 units.
The maritime transport sector reaped the notable losses of the day, along with rubber and air transport sectors.
Transportation company Kawasaki Kisen Kaisha, K Line, recorded the most significant drop among Nikkei companies. It lost 4.14%, followed by printer company Seiko Epson, losing 4.05%.
Lacerte had the highest trading volume of the session. The Semiconductor components maker advanced by 2.97%.
On the other hand, Toyota, the automotive manufacturer, raised by 0.04%. Meanwhile, Nintendo, the video game developer, and distributor grew by 0.14%.
The Softbank group lost 0.11%, and the Sony technology group added 0.34%.
In the first section, 1,177 companies fell. At the same time, 910 shares advanced, while 105 closed unchanged. The trading volume amounted to 2.24 trillion yen.
Hong Kong Stocks Ended the Positive Streak
Hong Kong stocks closed lower on Wednesday following a surprise surge in inflation. Besides, investors’ worries about slowing China’s growth hurt the market sentiment.
The Hang Seng Index slipped by 0.63% or 175.95 points to 27,787.46. Meanwhile, the China Enterprises Index yielded almost 0.5% or 48.25 to 10,065.07.
The Shanghai Composite Index dropped by 1.07% or 38.02 points to 3,528.50. The Shenzhen Composite Index on China’s second exchange slipped by 0.88% or 21.90 points to 2,470.07.
All the sub-indices closed the negative territory. Commerce and Industry lost 0.05%, Services yielded 0.3%, Real Estate decreased by 1.25%, and Finance slipped by 1.37%.
Insurers had the worst day, with Ping An plummeting by 2.08% and AIA losing 1.8%. The banking giants did not perform much better as HSBC yielded 1.55%, and ICBC declined by 1.12%.
In real estate, Henderson Land dropped the most by 2.42%. CK Asset followed it with a decrease of 2.31%.
As for the large digital companies, Tencent rebounded by 0.18%, and Alibaba advanced by 0.58%. The day has not been favorable for Meituan, which dropped by 1.69%.
BYD, a vehicle manufacturer, suffered a correction from its last positive days by 5.64%. On the other hand, Wuxi Biologics skyrocketed by 6.47%.
Among Chinese state oil companies, Sinopec added 0.53%, Petrochina yielded 1.72%, and Cnooc lost 1.07%.
The business volume of the day was 143,630 million Hong Kong dollars.
European Stocks Sink after CPI in the UK
According to the latest data, housing prices in the UK climbed by 10%, while the consumer price index jumped to 2.5%. Transport, clothing, and cake prices led CPI to higher and outpaced expectations.
Debates over inflation concerns weighed on the European stocks, which moved to the negative territory on Wednesday.
STOXX 600 dropped by 0.3% or 0.96 points to 0.96. Meanwhile, the FTSE 100 yielded 0.5% and Paris lost 0.2%. Frankfurt’s DAX slipped by 0.2% as well.
According to Laith Khalaf, an analyst at AJ Bell, things are not running as hot since inflation in the UK is still about half the rate in the US. However, the direction and speed of travel are worrying.
The UK’s producer price index, which measures inflation from producers’ perspective, dropped below expectations. CMC Markets analyst Michael Hewson declares that the first signs of a slowdown in inflationary pressure are reflected in PPI.
UK PPI rose 4.3% year-over-year, down from 4.4% in the month prior and below expectations of 4.8%.
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