Asian Shares Follow Wall Street Lower

Asian stocks tumbled on Thursday as investors reacted to a worsening Covid-19 health crisis and a downbeat economic outlook from the Federal Reserve.

Amid rising virus cases and vaccine delays, Federal Reserve officials flagged a worrying slowdown in the pace of the economic recovery overnight.

China’s Shanghai Composite Index slumped 68.17 points, or 1.9 percent, to 3,505.18 amid lingering worries over policy tightening. Hong Kong’s Hang Seng Index plunged 746.76 points, or 2.6 percent to 28,550.77.

Japanese shares ended sharply lower as tech stocks succumbed to heavy selling pressure after recent strong gains. The Nikkei 225 Index fell 437.79 points, or 1.5 percent, to 28,197.42, while the broader Topix closed 1.1 percent lower at 1,838.85.

Chip-related shares were among the worst hit, with Renesas Electronics losing 5.9 percent and Advantest falling 4.3 percent. Media and internet advertising company CyberAgent plunged 9.2 percent.

Fanuc shed 1 percent despite the robotics company raising its operating profit forecast for a second time. Heavyweight SoftBank Group ended 3.6 percent lower.

Nissan Motor gained 1.8 percent after the automaker said all of its new vehicles in key markets such as Japan, China, the U.S. and Europe will be partly or fully electrified by the early 2030s.

In economic news, a government report showed the value of retail sales in Japan fell an annual 0.3 percent in December. That beat expectations for a decline of 0.4 percent following the downwardly revised 0.6 percent increase in November.

Australian markets ended deep in the red after the Federal Reserve flagged a potential slowdown in the economic recovery.

The S&P/ASX 200 Index index fell as much as 2.4 percent in its worst session since September 9th before recouping some of its loss to end the session down 130.90 points, or 1.9 percent, at 6,649.70. The broader All Ordinaries Index plummeted 142.60 points, or 2 percent, to 6,917.60.

Iron ore miner Fortescue Metals Group slumped 4 percent after filing its December 2020 quarterly production report. Heavyweights BHP and Rio Tinto fell 1.7 percent and 2.9 percent, respectively.

Gold miner Newcrest Mining shed 2.8 percent as it reported a drop in gold production from the same quarter last year due to lower output from its Cadia and Lihir mines.

The big four banks fell between 0.9 percent and 1.7 percent. Tech stocks fell heavily, with Afterpay giving up 6.2 percent. In the energy sector, Woodside Petroleum and Santos declined around 2 percent, while Oil Search plummeted 3.9 percent.

Seoul stocks fell sharply amid massive selling by foreign investors. The benchmark Kospi dropped 53.51 points, or 1.7 percent, to 3,069.05 after the Fed didn’t announce new measures to quicken the economic recovery.

Samsung Electronics lost 2.2 percent despite the company forecasting solid demand for its chips in the current quarter. No. 2 chipmaker SK Hynix slumped 4.3 percent.

In economic news, business sentiment in South Korea ticked higher in January, the latest survey from the Bank of Korea said, with an index score of 85.0 – up from 82.0 in December.

New Zealand shares tumbled amid deepening concerns about stretched valuations in equities markets. The benchmark NZX-50 Index ended down 287.54 points, or 2.2 percent, at 13,086.46, dragged down by financials and utilities.

Following a probe into multiple outages and cyberattacks that hit stock exchange operator NZX last year, the Financial Markets Authority found the bourse’s systems were “insufficient” and failed to meet standards.

New Zealand posted a merchandise trade surplus of NZ$17 million in December, Statistics New Zealand said today, following the NZ$252 million surplus in November. Exports dropped 2.7 percent year-on-year, while dairy exports fell 19 percent.

U.S. stocks suffered their biggest single-day percentage drop in three months on Wednesday, with concerns about the impact of new, more contagious coronavirus strains, vaccine delays and stimulus uncertainty weighing on the markets.

There was some disappointment as the Federal Reserve didn’t provide additional clarity about the outlook for its bond purchases.

The Dow Jones Industrial Average lost about 2.1 percent, while the tech-heavy Nasdaq Composite index and the S&P 500 gave up around 2.6 percent each.

Business News