TOKYO — Asian stocks mostly gained on Tuesday amid a global decline in tech stocks, including Japan’s SoftBank, which reported heavy losses caused by the market slowdown.
These concerns come on top of worries about inflation and what central banks might do to curb this trend. Higher interest rates tend to hurt stock prices.
Shares fell in Tokyo but rose in other regional markets. ES00 American Futures Contracts,
rose slightly as oil prices fell.
Japanese tech investor SoftBank Group Corp. 9984,
fell more than 4% in Tokyo trading. On Monday, it announced a record quarterly loss of $23 billion. A global dive into tech-related issues, such as Chinese e-commerce giant Alibaba BABA,
dragged on his sprawling portfolio of investments.
Analysts monitoring Asian markets said regional tensions also remained a risk, due to the flare-up between China and Taiwan after US House Speaker Nancy Pelosi’s recent visit to Taiwan.
China said it was extending threatening military exercises around Taiwan, disrupting sea and air traffic and raising concerns over trade.
“It is worth following the geopolitical landscape, as any major developments on the China/Taiwan front could impact the overall demand for risk. China has confirmed that it will expand military exercises around Taiwan and that the military would conduct ‘regular’ drills on the eastern side of the Taiwan Strait midline,” said Anderson Alves of ActivTrades.
The Japanese reference Nikkei 225 NIK,
plunged 0.8% in morning trading. Australian S&P/ASX 200 XJO,
edged up 0.3% and South Korea’s Kospi 180721,
slightly higher by 0.2%. Hang Seng HSI from Hong Kong,
jumped 0.9%, while the Shanghai Composite SHCOMP,
increased slightly by 0.3%. Stocks rose in Taiwan Y9999,
and Indonesia JAKIDX,
Singapore’s markets were closed for a holiday.
The rise in COVID-19 cases in some Asian countries and their potential impact on supply chains that are a lifeline for some of the region’s largest manufacturers are also of concern.
Tech stocks were the biggest drag on Wall Street on Monday. The S&P 500 SPX,
slipped 0.1% to 4,140.06 and the Nasdaq COMP,
lost 0.1% to 12,644.46. The Dow Jones Industrial Average DJIA,
closed 0.1% higher at 32,832.54.
The latest market swings have come as investors brace for a busy week of economic updates that could help determine whether the Federal Reserve’s efforts to cool the economy and tame inflation are working, or whether the bank Central will continue to aggressively raise interest rates. Wall Street fears that the Fed is braking too hard and causing a recession.
The Fed is expected to raise short-term interest rates an additional 0.75 percentage points at its next meeting.
“Early indications of inflationary pressures appear to be easing, which will be an important catalyst for the market,” said Quincy Krosby, chief global strategist for LPL Financial.
The benchmark S&P 500 just posted three straight weekly gains.
The US Department of Labor will release its July consumer price report on Wednesday, followed by its wholesale price report on Thursday.
This week’s inflation updates follow last week’s reports showing that the job market remains strong. While this is good for the economy, it has complicated the Fed’s efforts to calm inflation.
Investors are still eyeing the latest round of corporate earnings, which could also provide more detail on how hard inflation is hitting consumers and businesses.
Clean energy companies gained traction after the Senate approved the Democrats’ big economic package for the election year, which includes funding to help fight climate change. First Solar rose 4.7%.
Bond yields fell. The 10-year Treasury yield, which influences interest rates on mortgages and other consumer loans, slipped to 2.76% from 2.83% on Friday evening.
In energy trading, gross US benchmark CLU22,
fell 23 cents to $90.53 a barrel in electronic trading on the New York Mercantile Exchange. It added $1.89 to $90.76 a barrel on Monday.
Brent crude BRNV22,
the international standard lost 22 cents to $96.43 a barrel.
In currency trading, the US dollar USDJPY,
fell to 134.78 Japanese yen from 134.98 yen.