Asia’s major stock indexes slipped into the red on Wednesday as fading hopes of an imminent interest rates turnaround and a gloomy global economic picture brought the mood down on trading floors.
Investors were in a risk-averse frame of mind ahead of the release of US jobs data this week, and the publication of Fed minutes and the ISM survey on US manufacturing due out on Wednesday.
Hong Kong stocks extended declines tracking a broader Asian sell-off, as uncertainties about China’s economic recovery kept investors on the sidelines.
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Hong Kong-listed tech giants, which tend to be sensitive to interest rate movements, tumbled 2.4%. The Hang Seng Index lost 0.85%, or 142.14 points, to 16,646.41, while the Hang Seng China Enterprises Index fell 0.77%.
Chinese gaming stocks edged up 0.6% in earlier trade to outperform a weak broader market, after it was reported China had removed a gaming regulatory official, in what is being seen as a step to calm the market which had feared another tech crackdown after the release of new gaming spending rules.
But the blue-chip CSI 300 Index fell 0.24%, while the Shanghai Composite Index edged up 0.17%, or 4.97 points, to 2,967.25. The Shenzhen Composite Index on China’s second exchange dropped 0.61%, or 11.15 points, to 1,812.71.
And the negative mood continued elsewhere across Asia, where Sydney, Seoul and Taipei were among the biggest losers, while Mumbai, Singapore, Wellington, Bangkok, Manila and Jakarta were also down. Japan’s markets were shut for a public holiday.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.3% after a 1.0% drop on Tuesday in a sluggish start to 2024. The index rose 4.6% in 2023.
Europe was set to open lower, with Eurostoxx 50 futures down 0.4% and FTSE futures off 0.3%. S&P 500 futures and Nasdaq futures were both down 0.1%.
Apple Drags on Nasdaq
Overnight, Wall Street’s euphoria about the prospects for rate cuts cooled as stocks retreated from record highs. The CME FedWatch Tool suggests a 21.4% chance that US rates will remain steady in March, up from 11.4% on December 29.
The Nasdaq slid 1.6%, dragged lower by a nearly 3% drop in Apple to a seven-week low after Barclays downgraded its shares.
Tesla shares ended flat after a record number of electric vehicle deliveries in the fourth quarter wasn’t enough to prevent China’s BYD from taking its spot as the top EV maker.
A climb in US Treasury yields in the New Year also pressured stocks. The 10-year yield briefly popped above 4% overnight for the first time in two weeks before closing at 3.9406%, up 8 basis points on the day.
Cash Treasuries were not traded in Asia due to the holiday in Japan.
The US dollar, which climbed 0.8% against its peers overnight to a two-week high, held steady at 102.1.
Bitcoin rose 0.7% to $45,287, not far from a 21-month peak of $45,922 on Tuesday.
Oil prices extended declines. US crude futures slipped 0.3% to $70.18 a barrel, after dropping more than 1% on Tuesday, while Brent was also 0.3% lower at $75.68 a barrel.
Key figures
Tokyo – Nikkei 225 <> CLOSED
Hong Kong – Hang Seng Index < DOWN 0.85% at 16,646.41 (close)
Shanghai – Composite > UP 0.17% at 2,967.25 (close)
London – FTSE 100 < DOWN 0.10% at 7,713.61 (0932 GMT)
New York – Dow > UP 0.07% at 37,715.04 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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