Precise Investors

Saturday, July 2, 2022
Stocks & Shares

Asian shares follow Wall Street lower

Asian shares

Nikkei 225 tumbled 0.3% to end at 29,598.66, Kospi dropped 0.4% to 2,952.19, Hang Seng shed 1.3% to 25,312.09, and the Shanghai Composite declined 0.4% to 3,525.09

Asian shares mostly declined Thursday after stock indexes fell on Wall Street.

Japan’s benchmark Nikkei 225 tumbled 0.3% to end at 29,598.66, although it had momentarily picked up after major business daily Nikkei reported Prime Minister Fumio Kishida will propose Friday a government stimulus package totalling a record 55.7 trillion yen ($488 billion). The rally quickly ran out of steam as more concerns, such as the coronavirus pandemic, weighed in.

Australia’s S&P/ASX 200 rose 0.1% to 7,379.20, while South Korea’s Kospi dropped 0.4% to 2,952.19. Hong Kong’s Hang Seng shed 1.3% to 25,312.09. The Shanghai Composite declined 0.4% to 3,525.09.

Without a positive lead from Wall Street overnight and a relatively quiet day in terms of economic data, sentiments in the region may be on hold, potentially leading to some sideways movement, said Yeap Jun Rong, a market strategist at IG in Singapore.

Recent government data have shown the coronavirus pandemic continues to hurt the Japanese economy. A supply crunch in chips and other parts needed for the auto industry, a mainstay of the world’s third-largest economy, is one reason.

The damage to consumer spending brought on by recent government measures to close restaurants early and open theatres to limited crowds is another factor. Japan has never had a lockdown but has called periodically for a “state of emergency” to curb the spread of infections.

Junichi Makino, chief economist for SMBC Nikko Securities, said the Japanese recovery that many initially expected to begin this year may not come until fiscal 2022, which begins in April.

But extreme pessimism is not called for. Auto production will likely get back to normal by the October-December quarter, he said.

Investors are also watching the Bank of Korea policy-setting meeting scheduled for next week for whether the central bank will raise its key rate. Policymakers have hinted at such a move.


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