Asian Shares Retreat On China Jitters

Asian stocks fell on Friday as concerns about the fast-spreading Delta variant and regulatory actions in China outweighed optimism around corporate earnings.

Chinese shares ended lower amid fears of foreign investor exodus. The benchmark Shanghai Composite index slipped 14.37 points, or 0.42 percent, to 3,397.36 while Hong Kong’s Hang Seng index ended down 354.29 points, or 1.35 percent, at 25,961.03.

Japanese shares hit over six-month lows amid earnings disappointments and concerns over recovery in growth from virus flareups. The Nikkei average slumped 498.83 points, or 1.80 percent, to 27,283.59, marking its biggest decline since June 21 and the lowest close since Jan. 6.

The broader Topix index finished down 1.37 percent at 1,901.08 as the government proposed states of emergency in three prefectures near Olympic host city Tokyo as well as Osaka Prefecture through August 31.

Sumitomo Dainippon Pharma shares plummeted 10.8 percent after posting lower-than-expected earnings. Fuji Electric, Astellas Pharma and Fujitsu tumbled 8-9 percent after reporting their financial results.

Shipping companies gained ground, with Mitsui OSK Lines rallying 12.3 percent, Nippon Yusen climbing 6.9 percent and Kawasaki Kisen rising 6.4 percent.

In economic releases, industrial output and retail sales figures for June beat expectations while the jobless rate in Japan came in at a seasonally adjusted 2.9 percent in the month.

Australian markets ended lower amid worries about a spike in COVID-19 cases in the most populous state of New South Wales.

The benchmark S&P/ASX 200 index dropped 24.80 points, or 0.33 percent, to 7,392.60 while the broader All Ordinaries index ended down 31 points, or 0.40 percent, at 7,664.20.

Tech stocks succumbed to selling pressure, with Appen losing 3.7 percent and Afterpay falling as much as 5.3 percent.

Origin Energy plunged 7.9 percent after the power and gas retailer issued a grim outlook for its core earnings in its energy markets business. Rival AGL Energy declined as much as 4% to hit a record low.

Banks ended narrowly mixed while miners fell broadly lower despite copper prices reaching record highs. NAB rose 0.6 percent after announcing a $2.5 billion share buyback.

In economic news, central bank data showed that private sector credit in Australia was up 0.9 percent month-on-month in June – accelerating from 0.4 percent in May.

Seoul stocks fell sharply as rising uncertainties related to China’s clampdown on its tech firms promoted investors to cash in recent gains. The benchmark Kospi fell 40.33 points, or 1.24 percent, to close at 3,202.32, marking the index’s largest daily drop since May 13.

Chipmaker SK Hynix dropped 1.3 percent, automaker Hyundai Motor shed 1.8 percent and pharmaceutical firm Samsung Biologics lost 2.3 percent.

Industrial output in South Korea expanded a seasonally adjusted 2.2 percent sequentially in June, Statistics Korea said earlier in the day. That beat expectations for an increase of 1.0 percent following the downwardly revised 1.0 percent contraction in May.

Separate data showed the value of retail sales in the country rose a seasonally adjusted 1.4 percent month-on-month in June- beating expectations for an increase of 1.2 percent following the 1.9 percent contraction in May.

The Economic Sentiment Index – a composite of the Bank of Korea’s business and consumer surveys – came in at 103.9 in July, down from 109.4 in June.

New Zealand shares tumbled, with the benchmark NZX-50 index closing down 134.33 points, or 1.06 percent, at 12,594.52.

A2 Milk slumped 4.6 percent while Fletcher Building ended 1.1 percent higher, reversing early losses after data showed the total number of building permits issued in the country climbed a seasonally adjusted 3.8 percent in June.

U.S. stocks eked out modest gains overnight as weaker than expected data cemented expectations that monetary policy will remain accommodative a while longer.

The Commerce Department said real U.S. GDP surged up by 6.5 percent in the second quarter following a 6.3 percent jump in the first quarter. Economists had expected GDP to spike by 8.5 percent.

Pending home sales dropped in June and jobless claims pulled back less than expected in the week ended July 24th, offering more evidence that the economic recovery has started to slow.

The Dow and the S&P 500 set new record intraday highs before ending up around 0.4 percent. The tech-heavy Nasdaq Composite inched up 0.1 percent.