Asian stocks close lower, with an eye on Covid-19
Highlights:
- USA
Wall Street closed mixed with the Dow Jones adding 0.15%, the S&P 500 yielding 0.33%, and the Nasdaq slipping by 0.70%. - ASIA
Nikkei and Kospi followed Wall Street’s decline. Nikkei shed 0.98% while Kospi lost 0.28%. Hang seng closed almost flat, adding a slight 0.03%. - EUROPE
The rise in Covid-19 cases did not stop STOXX 600 from posting profits, trading with a rise of 0.3%.
Wall Street Settled Mixed while Bonds Rallied
Wall Street stocks closed mixed this Thursday. The Dow Jones rose 0.15% or 53.79 points, to 34,987.02. The session was marked by better than expected business results, including Morgan Stanley, which did not rescue the S&P 500 or the Nasdaq from the red.
The selective S&P 500 lost 0.33% or 14.27 points, to 4,360.03.
The Nasdaq composite index, bringing together the most important technology companies, dropped by 0.70% or 101.82 points, to 14,543.13.
Investors thus seemed to ignore the corporate results presented this Thursday by Morgan Stanley, which exceeded expectations by experts. Still, its shares closed with a modest rise of 0.18%.
For analysts, this is because the market was already forecasting these good figures.
Although the S&P 500 posted a slight decline on Thursday, the index has been close to its record lately, having risen 16% so far this year, a pace that experts expect will continue.
By sector, public services companies led the gains by 1.19%. Meanwhile, essential consumer goods added 0.42%, and financial companies increased by 0.38%. The energy sector yielded 1,41%, the technological sector dropped by 0.84%, and non-essential consumer goods decreased by 0.64%.
Among the thirty Dow Jones stocks, Honeywell was the most significant winner adding 2.21%. United Health hiked by 1.28%, and Home Depot increased by 1.09%. The biggest loser of the session was Salesforce which shed 2%. At the same time, Walgreens Boots Alliance declined by 1.34%, and Intel lost 1.26%.
Investors turned to bonds in hopes of weakening inflation
This Wednesday, Jerome Powell, the head of the Fed, assured that a jump in the US consumer price index did not mean that high inflation would persist. However, he stressed that the economy is far from the central bank’s objectives to propose a change in monetary policy.
After Powell’s statements, longer-dated bonds found buyers. The prospect of price rise reduction has turned investors back into Treasuries.
Local shares dragged Nikkei by 0.98%
The Nikkei slipped by 0.98%, 276.01 points, to 28,003.08 this Friday due to the poor performance among benchmark companies in the local market. Besides, investors were influenced by fears of a further rebound in covid-19 cases in Tokyo.
The Topix lost 0.38% or 7.42 points to stand at 1,932.19 units.
The Tokyo stock market reflected the sudden drop in the Nasdaq Tech Index on Wall Street. Besides, it was discouraged by the fall in local benchmarks such as the textile group Fast Retailing, owner of the clothing brand Uniqlo. The company yielded the most trading volume for the day, dropping by 2.61%.
Analysts consider that the fall in the Nikkei, substantially more significant than the Topix, responds to the financial reports of the first-line Japanese stocks. Their results came to be worse than expected.
On the other hand, concerns were renewed about the possibility of a resurgence in the Covid-19 cases.
Among the sectors, pharmaceuticals, precision instruments, and mining registered the major losses for the session.
The pharmaceutical company Eisai experienced the worst fall on the Nikkei, slumping by 12.95%.
Semiconductor maker Tokyo Electron yielded 1.62%, and the Softbank group lost 0.7%.
Video game developer and distributor Nintendo declined by 1.23%. Meanwhile, the technology company Sony lost 2.19%.
Automotive manufacturer Toyota resisted with an increase of 0.34%.
Kospi slumped after the Wall Street decline
The Seoul Stock Exchange settled lower on Friday. The Kospi lost 0.28% or 9.31 points at 3,276.91. Meanwhile, the Kosdaq technological index advanced 0.22%, 2.33 points or to 1,051.98 units.
Seoul opened in negative territory, and it remained there for the rest of the day. Nikkei was dragged by Thursday’s decline in the New York stock market. Also, the number of Covid-19 infections remains high in South Korea and other parts of the globe.
The technological giant Samsung Electronics, with the highest capitalization on the Kospi, sank by 0.99%. At the same time, SK Hynix, the second largest world manufacturer of memory chips, lost 1.62%.
In turn, Naver, the operator of the main Internet search engine in South Korea, fell by 0.45%. Kakao, the owner of the most significant South Korean messaging application, slipped by 1.57%.
Samsung Biologics enjoyed a 2.86% rise in the biopharmaceutical sector, while its competitor Celltrion gained 0.94%.
The largest national vehicle manufacturer, Hyundai Motor, sank by 0.65%.
Hang Seng closed a flat session
Among the sub-indices, only the Finance sector resisted the generalized losses and added 0.35%. It happened thanks to the surge of the trading company HKEX, which appreciated a solid 3.76% rise. Commerce and Industry shed 0.06%, Real Estate lost 0.38%, and Services decreased by 1%.
The developer China Overseas added 0.99% but could not save the real estate from ending in the red. The most significant loser of the session was Hang Lung Properties sinking by 1.48%.
Digital giants closed mixed. Alibaba declined by 0.57%, and Tencent dropped by 0.18%. Meanwhile, Meituan advanced by 0.14%.
The session was unsuccessful for the Chinese state oil companies. Petrochina settled in a negative territory slumping by 2.03%.
On the other hand, the technological Xiaomi made a significant profit today. The company’s shares surged by 4.82% after the consulting firm Canalys indicated that in the second quarter, it surpassed Apple. For the first time, Xiaomi became the second-largest seller of smartphones in the world.
The business volume of the trading session was 153.7 billion Hong Kong dollars.
European stocks advanced despite a growth in Covid-19 cases
European shares advanced due to the travel stocks rebound from the sharp losses they posted last week. Besides, positive results of earnings reports dimmed concerns about Covid-19 cases rise. Expectations buoyed the market after companies benefited from the reopening of big industries.
STOXX 600 index expanded by 0.3%. Swedbank climbed by 3.4% after its better-than-expected earnings report. Cartier maker Richemont gained 1%.
On the other hand, Sweden’s Ericsson slipped by 9.4% after publishing earnings below market estimates.
As for the UK’s FTSE 100 and midcap stocks, they gained 0.5% each after sharp losses earlier this week.
Despite the confident sentiment in the market, the Delta variant of the coronavirus is posing a higher risk of longer-term damage to the global economy. UK manufacturers reported that the increase in Delta variant cases is hitting production. Investors also worry that a surge in infections puts Europe at the risk of crushing the region’s recovery.
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