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Asian shares fall after Wall Street stock indices fall

Asian stocks mostly fell on Thursday after stock indices on Wall Street fell.

Japan's benchmark Nikkei 225 index, according to ดาวน์โหลด Mt4 Exness, fell 0.7% to 29,490.53 in early trading. Australia's S & P / ASX 200 rose 0.2% to 7,381.40 and South Korea's Kospi fell 0.6% to 2,944.52. Hong Kong's Hang Seng fell 1.7 per cent to 25,227.83. The Shanghai Composite index fell 0.5% to 3,520.77 points.

Recent government data showed that the coronavirus pandemic continues to wreak havoc on the Japanese economy. One of the reasons is the reduced supply of chips and other parts needed for the production of cars, which form the backbone of the world's third-largest economy.

Another is the damage to consumer spending caused by recent government measures to close restaurants early and open theatres to a limited number of visitors. Japan has never experienced an isolation, but has periodically called for a state of emergency to limit the spread of infections.

Junichi Makino, chief economist at SMBC Nikko Securities, said Japan's economic recovery, which many initially expected to start this year, might have to wait until fiscal 2022.

But extreme pessimism is not required. He said car production is likely to return to normal by October-December.

Investors are also watching the Bank of Korea's policy-setting meeting scheduled for next week to see whether the central bank will raise its key rate. Policy makers have hinted at such a move.

Without a positive outlook from Wall Street the day before and a relatively calm day in terms of economic data, sentiment in the region could be held back, which could lead to some sideways movement, said Yeap Jun Rong, IG market strategist in Singapore.

On Wall Street, the S&P 500 index fell 12.23 points, or 0.3 per cent, to 4,688.67 points after earlier oscillating between a slight rise and a 0.4 per cent fall. It is just 13.03 points below its all-time high set a week and a half ago.

The Dow Jones Industrial Average fell 211.17, or 0.6%, to 35,931.05 and the Nasdaq composite index lost 52.28, or 0.3%, to 15,921.57.

The 4.7% drop for Visa was one of the heaviest for the market. It fell after Amazon said it would no longer accept Visa credit cards issued in the UK because of a dispute over fees.

Most stocks in the S&P 500 also fell, while smaller stocks in the Russell 2000 index fell even more, down 1.2%. But gains in some of the larger stocks helped cushion the losses. Apple shares gained 1.6% and Tesla gained 3.3%. As these are the two largest stocks on Wall Street by market value, their performance carries additional weight to the S&P 500.

Yields in the US government bond market, the centre of some of the most turbulent developments on Wall Street in recent times, have declined after a week of significant gains. The yield on the 10-year Treasury bond fell to 1.59% from 1.63% on Wednesday evening.

Short-term yields also fell, losing some of their recent surge. Last week, higher-than-expected inflation in the economy prompted investors to raise their expectations of when the Federal Reserve will raise interest rates to a record low.

Stocks have mostly rallied over the past month as companies reported much higher profits over the summer than analysts had expected. Several big retailers joined the parade on Wednesday, including Lowe's, Target and TJX, which operates TJ Maxx and Marshalls shops. But the stock market response was mixed.

TJX rose 5.8% after reporting better-than-expected revenues and profits for the latest quarter. Home goods retailer Lowe's added 0.4% as it raised its revenue forecast for the year after strong financial results for the third quarter.

But Target fell 4.7%, although it reported better-than-expected profits. The company said it made less profit for every dollar of sales during the quarter than a year earlier, in part because of higher commodity and supply chain costs.

Such pressures and the extent to which they affect companies' net profits are under the microscope as relatively high inflation continues to sweep the world. Many companies have warned that their profitability could suffer due to supply chain issues and higher costs for everything from workers' wages to raw materials.

The housing market report showed some of these pressures. Builders built fewer homes last month than in September, contrary to economists' expectations for growth. That could be a sign that supply shortages and higher costs are slowing the industry. But the number of building permits also rose more than expected, perhaps a sign that builders see this pressure eventually easing.

In energy trading, benchmark US crude fell 72 cents to $77.64 a barrel. International benchmark Brent crude lost 32 cents to $79.96 a barrel.

In currency trading, the recent slowdown in the dollar is helping Asian markets adjust to a wait-and-see stance. The US dollar fell to 113.99 yen from 114.07 yen. The euro stood at $1.1332, down from $1.1319.


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