Asian Shares Fall In Thin Holiday Trading

Asian stocks fell in thin holiday trading on Tuesday amid uncertainty over a U.S. stimulus package and concerns over delays in distributing Covid-19 vaccines. Investors also awaited cues from a two-day policy meeting of the U.S. Federal Reserve starting later today.

Chinese shares ended lower as financials succumbed to selling pressure against a backdrop of tightening liquidity conditions. With short-term rates hitting pre-Covid levels, speculation was rife that the country’s central bank might adopt a tightening bias in its monetary policy.

The benchmark Shanghai Composite Index slumped 54.81 points, or 1.5 percent, to 3,569.43, while Hong Kong’s Hang Seng Index plunged 767.75 points, or 2.6 percent, to 29,391.26.

Japanese shares tumbled on worries about potential roadblocks to the Biden administration’s $1.9 trillion stimulus and delays in distributing coronavirus vaccines.

The Nikkei 225 Index ended down 276.11 points, or 1 percent, at 28,546.18, retreating from the 30-year high logged the previous day. The broader Topix closed 0.8 percent lower at 1,848.

Marine transportation issues fell, with Nippon Yusen losing 4.5 percent and Kawasaki Kisen giving up 6 percent. Steelmakers Kobe Steel and JFE Holdings shed 2.9 percent and 5.5 percent, respectively.

In economic news, minutes of the Bank of Japan’s December meeting showed some discussions on the topic of exchange rates and further policy easing in light of the economic stresses caused by the pandemic.

Australian markets were closed in observance of Australia Day. New Zealand shares fell, dragged down by utility and tourism-related stocks.

The benchmark NZX 50 Index dropped 75.64 points, or 0.6 percent, to 13,323.46, a day after the country confirmed its first case of Covid-19 in several months, leading neighboring Australia to suspend a travel bubble with the country for 72 hours. Auckland International Airport fell 2.8 percent and Contact Energy lost 3.7 percent.

The services sector in New Zealand continued to contract in December, albeit at a slower pace, the latest survey from BusinessNZ showed with a Performance of Services Index score of 49.2, up from 46.7 in November.

Seoul stocks fell sharply as foreign and institutional investors locked in profits. The benchmark Kospi tumbled 68.68 points, or 2.1 percent, to 3,140.31 after hitting a record high in the previous session. Samsung Electronics, Hyundai Motor, LG Chem and SK Hynix lost 3-4 percent.

South Korea’s gross domestic product climbed a seasonally adjusted 1.1 percent sequentially in the fourth quarter of 2020, the Bank of Korea said in an advance estimate. That beat expectations for an increase of 0.7 percent following the 2.1 percent gain in the previous three months.

On a yearly basis, GDP sank 1.4 percent compared to forecasts for a drop of 1.7 percent following the 1.1 percent decline in the three months prior.

U.S. stocks ended mixed overnight amid concerns over the timing and size of fiscal stimulus. The Dow Jones Industrial Average slipped 0.1 percent, while the S&P 500 rose 0.4 percent and the tech-heavy Nasdaq Composite added 0.7 percent to reach fresh record closing highs.