Global Stocks in a Depressed Mood

Highlights:

• USA
  The Dow Jones index fell by 0.2%, or 68.93 points, to 35,031.07.
  The S&P-500 lost 0.13% or 5.93 points, to 4,514.1 points.
  The Nasdaq slipped by 0.57% or 87.69 points to 15,286.64.
• ASIA
  The Nikkei lost 0.57% or 173.02 points, to 30,008.19.
  The Kospi closed with a loss of 1.53% or 48.29 at 3,114.70.
  The Hang Seng Index fell by 2.3% or 604.93 points to 25,716.
• EUROPE
  The EuroStoxx 50 index dropped by 0.49%, the FTSEurofirst 300 yielded 0.47%, and the Stoxx 600 lost 0.44%.

Wall Street in red, and the Dow Jones hits a two week low

The New York Stock Exchange ended in the red on Wednesday amid renewed concerns about the strength of the economic recovery in the US. There’s uncertainty surrounding the Fed’s monetary policy decisions in the US.

In its Beige Book published two hours before the close, the US central bank noted that the US economy had downgraded slightly in August.

The Dow Jones index fell by 0.2%, or 68.93 points, to 35,031.07.

The S&P-500 lost 0.13% or 5.93 points, to 4,514.1 points.

The Nasdaq slipped by 0.57% or 87.69 points to 15,286.64.

Apple shed 1.07%, and Facebook lost 1.23%, weighing on the trend.

 Nervousness over the economic recovery

According to Morgan Stanley strategist Andrew Sheets, the market is in the final stages of a mid-cycle transition, so this could be a rough September and October.

The Beige Book attested that US growth slowed this summer because of the Delta variant. Analysts say this scenario remains a source of uncertainty as the gap between the demand for labor and job seekers has widened further.

For Aoifinn Devitt, director of the Moneta firm, nothing has changed substantially so investors are reluctant to put money in the market.

In terms of sectors, public services, essential consumer goods, and real estate were the most favored of the day. Meanwhile, energy, raw materials, and communications were the most affected.

Among the 30 Dow Jones companies, Coca-Cola led the advances, increasing by 1.35%. Visa followed it with a rise of 1.25%. 3M also gained 1.2%. Dow was the most affected, losing 1.91%. Also, UnitedHealth shed 1.39%, and Boeing yielded 1.33%.

The online payment giant PayPal Holdings dropped by 2.7% after announcing the takeover of the Japanese Paidy for $2.7 billion.

The crypto-asset exchange platform Coinbase fell by 3.2% after announcing that the SEC warned it of the risk of legal action if it proceeds with its proposed offer of interest-bearing cryptocurrency lending services.

Nikkei fell due to profit-taking sales

The Nikkei declined this Thursday and broke an eight-day streak of increases caused by the change of leadership in the ruling party.

The Nikkei lost 0.57% or 173.02 points, to 30,008.19, pushed by profit-taking sales. 

The Topix fell by 0.71% or 14.68 points to stand at 2,064.93.

The Tokyo stock market opened in the red after accumulating a rise of more than 9% in the last eight sessions.

Investors opted to collect profits and were also worried about the economic outlook in the United States. However, analysts think there are substantial buying needs, so the atmosphere will not collapse as a whole.

The machinery sector registered the biggest decline of the day, along with rubber and air transport sectors.

South Korean video game company Nexon posted the most extensive drop among Nikkei-listed firms, losing 4.6%. It was followed by the toilet manufacturer Toto, which fell 3.78%.

 

The Softbank group accumulated the highest volume of operations of the day, and its shares depreciated 1.92%.

It was followed by transactions by the manufacturer of components for semiconductors Lasertec, yielding 5.57%. Meanwhile, the transport company Nippon Yusen Kaisha slid by 0.71%.

Tokyo Electric Power Company went against the trend and recorded the highest rise on the Nikkei. It surged by 11.03%. Another electricity company Kansai Electric Power also registered a substantial raise of 5.36%.

Sony added 0.66% after announcing the purchase of the British video game studio Firesprite. 

 Regulatory concerns hit biggest companies on the Kospi

The Kospi index ended lower. Concerns about an economic slowdown in the US stock market continued to weigh on investor sentiment. All 10 of the top 10 stocks by market cap on the Kospi fell, including Kakao and NAVER. They plummeted due to concerns about platform regulations.

The Kospi closed with a loss of 1.53% or 48.29 at 3,114.70. The index, which started in the red at 3146.64 on the day, gradually increased its decline during the day. Based on the closing price, it is the lowest level since the 23rd of last month.

Seo Sang-young, a researcher at Mirae Asset Securities, stated that increased inflationary pressure from China and foreign and institutional sales due to the expiration date of futures options acted simultaneously.

On the simultaneous expiration of futures and options, foreigners and institutions net sold 318.2 billion won and 931.1 billion won, respectively. Individuals net bought 1.215 trillion won. 

Samsung Electronics, SK Hynix, Samsung Biologics, LG Chem, and Hyundai Motor ended bearishly among the top stocks by market cap. Naver plummeted by 2.56%, and Kakao plunged by 7.22%. 

By industry, all industries dropped except for textile, apparel, and telecommunication. Meanwhile, service, machinery, steel and metal, transportation equipment, transportation warehouses, and distribution showed the largest declines.

The Kosdaq index closed at 1,034.62, yielding 2.60 points or 0.25%.

China’s tech stocks led to a decline

China warned that gaming giants should not only focus on profits but requires them to remove some content. It indicated that further tightening of controls on the industry is needed. As a result, technology stocks have been hit again, dragging down Hong Kong stocks on Thursday. 

The Hang Seng Index fell by 2.3% or 604.93 points to 25,716. At the same time, the Hang Seng China Enterprises Index slipped by 2.81% or 265.81 points to 9,183.58. 

Tech companies like Tencent, Alibaba, Meituan, and Xiaomi posted some of the biggest drops of the day.

All the sub-indices except Services are closed in the red. Commerce and industry shed 3.58%, Finance lost 0.82%, and Real Estate declined by 0.63%.

The state oil company CNOOC performed the best, advancing by 1.81%. The financial company Citic followed it with a rise of 1.74%. As for the other increases, WH Group gained 1.56%, and Sinopec oil company advanced by 1.38%.

European stocks are cautious ahead of the ECB meeting

The main European stock markets declined on Thursday morning amid fears over an economic slowdown. 

The EuroStoxx 50 index dropped by 0.49%, the FTSEurofirst 300 yielded 0.47%, and the Stoxx 600 lost 0.44%.

The ECB meeting is a big event today when monetary policy decisions will be announced.

According to analysts, the board of governors will discuss a reduction in monthly asset purchases under the Pandemic Emergency Program.