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Asian stocks drop for second day as Wall St hits new high

Stock markets in Asia

The Shanghai Composite Index lost 0.7% to 3,580.22, Nikkei 225 declined 0.9% to 28,791.20, Hang Seng dropped 0.6% to 29,099.96, Kospi declined 0.4% to 3,289.17 and S&P-ASX 200 shed 0.6% to 7,260.30

Stock markets in Asia dropped for a second consecutive day Tuesday after Wall Street hit a new high on tech stock gains and the World Bank raised its forecast of Chinese economic growth.

Market benchmarks in Shanghai, Tokyo and Hong Kong retreated.

Overnight, Wall Street’s benchmark S&P 500 index added 0.2% as gains for Facebook, Nvidia and other tech stocks offset losses for other industries.

Investors are swinging between optimism about a global economic recovery backed by coronavirus vaccinations and concerns that central banks might withdraw stimulus to cool rising inflation pressures.

Traders are watching U.S. jobs data due out Friday for signs of whether the labour market will start to show initial signs of heating after the Federal Reserve said it might move up the target date for raising interest rates, Anderson Alves of ActivTrades said in a report.

Also, the World Bank on Tuesday raised its forecast of China’s economic growth this year to 8.5% from its April forecast of 8.1%. It said a full recovery requires progress in vaccinations against the coronavirus.

The Shanghai Composite Index lost 0.7% to 3,580.22 and the Nikkei 225 in Tokyo declined 0.9% to 28,791.20. The Hang Seng in Hong Kong dropped 0.6% to 29,099.96. The Kospi in Seoul declined 0.4% to 3,289.17 and Sydney’s S&P-ASX 200 shed 0.6% to 7,260.30.

On Wall Street, the S&P 500 advanced to 4,290.61 while the Dow Jones Industrial Average shed 0.4% to 34,283.27. The Nasdaq composite gained 1% to a record 14,500.51.

Nvidia soared 5% after The Sunday Times in Britain reported several big customers of U.K. semiconductor company Arm came out in support of its proposed takeover by Nvidia.

Facebook surged 4.2% after a federal judge dismissed antitrust lawsuits brought against it by the Federal Trade Commission (FTC) and a group of state attorneys general. Apple advanced 1.3%, Microsoft added 1.4% and Intel jumped 2.8%.

Stock prices look expensive to some investors after rising faster than corporate profits. Inflation remains a worry, even if more investors have come around to the Federal Reserve’s view that it will be only a temporary problem.

Economists expect Friday’s U.S. jobs numbers to show employers added 700,000 more than they cut in June. That would be an acceleration following a couple months of disappointingly slow hiring. They also expect the report to show that average hourly earnings jumped 3.7% in June from a year earlier.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Precise Investors. The information provided on Precise Investors is intended for informational purposes only. Precise Investors is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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