Asian shares were in retreat again on Friday with worried investors bracing themselves for more sharp rate hikes by the US Fed that they fear will help spark a global recession.
China markets were an outlier with hopeful traders looking for signals of more stimulus promises from the Communist Party congress in Beijing and buoyed by the authorities’ latest efforts to stabilise the market
Japan’s Nikkei share average, though, closed sharply below the key 27,000 mark, while the yen wilted at fresh 32-year lows, taking its cues from overnight Wall Street declines amid worries that US Federal Reserve’s aggressive rate hikes could trigger a serious downturn.
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However, losses were capped by strong gains for chip-related stocks amid a rise in the Philadelphia SE Semiconductor Index, along with strong earnings from IBM and domestic chip equipment supplier Disco Corp.
The Nikkei slid 0.43% to end the day at 26,890.58, not far from the intraday trough of 26,869.38. The broader Topix sagged 0.71% to 1,881.98.
Rate-sensitive real estate was the Nikkei’s worst-performing sector on Friday, down 1.67%, followed by utilities, which lost 1.26%.
Although the tech sector ended lower, chip-related stocks surged, with Tokyo Electron’s 4.6% jump making it the Nikkei’s best performer.
Investors are now looking ahead to Japanese earnings next week, when more than 300 companies are scheduled to report results, and a Bank of Japan policy meeting next Friday.
Japan’s central bank demonstrated its commitment to stimulus earlier in the day by announcing emergency bond buying for a second day to keep domestic yields in check, even as the yen sank to ever-deeper 32-year lows beyond 150 per dollar.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.64% lower but above the two-and-a-half year low it touched on Thursday. The index was set for second straight week of losses.
China Party Congress Hopes
Meanwhile, China stocks edged up as Beijing rolled out measures to help stabilise the markets during the ongoing Party Congress.
Securities firms rose 1.3% after China’s state-owned margin financing loan provider said on Thursday it will cut brokerages’ borrowing costs in a bid to promote stock investments.
And property developers added 1.5% after state media said China’s securities regulator will ease rules to allow certain property-related companies to raise capital via the domestic stock market.
However, shares of Chinese chipmakers retreated 2.2%, following a 5% jump from the previous session.
That came as Chinese chipmaker Yangtze Memory Technologies Co (YMTC) denied a media report that it had participated in emergency meetings convened by China’s industry ministry to discuss the impact of US sanctions.
The Shanghai Composite Index rose 0.13%, or 3.88 points, to 3,038.93, while the Shenzhen Composite Index on China’s second exchange fell 0.24%, or 4.74 points, to 1,966.93.
Mainland developers listed in Hong Kong jumped 2%, while tech giants traded in the city inched up 0.3%. The Hang Seng Index, though, dropped 0.42%, or 69.10 points, to 16,211.12.
Elsewhere across the region, equity markets were mixed with Indonesian shares up about 1%, while Singapore stocks slumped close to 1.5% and Australia’s resources-heavy share index lost 0.73%.
Indian stocks fell with Mumbai’s signature Nifty 50 index down 0.19%, or 33.35 points, at 17,530.60.
Yen Hits New 32-Year Low
Globally, US benchmark 10-year Treasury yields scaled fresh 14-year peaks, weighing on the equities market and pinning down gold prices.
Sterling edged lower after a short-lived rally following the resignation of Britain’s Prime Minister Liz Truss.
European stock futures indicated stocks were set to decline, with Eurostoxx 50 futures down 0.92%, German DAX futures down 1.04% and FTSE futures down 0.47%.
In the currency market, the Japanese yen breached a fresh 32-year low, and last traded at 150.39 per dollar. The currency weakened past the symbolic 150 level late on Thursday afternoon in Tokyo after being perilously close to the mark through the week.
The dollar index rose 0.124%, with the euro down 0.18% to $0.9765. Meanwhile, gold prices were set for a second weekly decline, while oil prices were near flat.
Key figures
Tokyo – Nikkei 225 < DOWN 0.43% at 26,890.58 (close)
Hong Kong – Hang Seng Index < DOWN 0.42% at 16,211.12 (close)
Shanghai – Composite > UP 0.13% at 3,038.93 (close)
London – FTSE 100 < DOWN 0.70% at 6,895 (0935 BST)
New York – Dow < DOWN 0.30% at 30,333.59 (Thursday close)
- Reuters with additional editing by Sean O’Meara
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