Asian stocks fall as Wall St retreats
Seoul and Tokyo settled lower, while Shanghai and Hong Kong ended in the green; European markets were trading in the negative territory
image for illustrative purpose
The US economy may be in stronger overall shape than expected. Both confidence among consumers in December and sales of previously occupied homes in November improved more than economists had expected. Encouraging signs that inflation is cooling globally also continue to pile up
Tokyo: Asian shares fell on Thursday after Wall Street hit the brakes on its big rally following disappointing corporate profit reports and warnings that the market had surged too far, too fast.
US futures rose, while oil prices dipped as data showed an unexpected increase in US inventories. Tokyo’s Nikkei-225 index fell 1.6 per cent to 33,140.47, with Japanese automaker Toyota leading losses on the benchmark, falling as much as 4 per cent.
The company said on Wednesday it is recalling one million vehicles over a defect that could cause airbags not to deploy, increasing the risk of injury. That came on top of news that Toyota small-car subsidiary Daihatsu had suspended shipments of all its vehicles in Japan and abroad after an investigation found improper safety testing involving 64 models, including some made for Toyota, Mazda and Subaru.
Japanese transport ministry officials raided Daihatsu’s offices on Thursday. Australia’s S&P/ASX 200 slipped 0.5 per cent to 7,504.10. South Korea’s Kospi shed 0.6 per cent to 2,600.02. Hong Kong’s Hang Seng was flat at 16,617.87, while the Shanghai Composite added 0.6 per cent to 2,918.71. India’s Sensex was 0.2 per cent higher and Bangkok’s SET gained 0.2 per cent. Wednesday’s losses on Wall Street were widespread, and roughly 95 per cent of companies within the S&P 500 declined. The S&P 500 slumped 1.5 per cent to 4,698.35 for its worst loss since beginning a monster-sized rally shortly before Halloween.
The Dow Jones Industrial Average dropped 1.3 per cent to 37,082.00 from its record high, while the Nasdaq composite sank 1.5 per cent to 14,777.94. FedEx tumbled 12.1 per cent for one of the market’s biggest losses after reporting weaker revenue and profit for the latest quarter than analysts expected. It also now expects its revenue for its full fiscal year to fall from year-earlier levels, rather than being roughly flat, because of pressures on demand.
The package delivery company pumps commerce around the world, and its signal for potentially weaker demand could dim the hope that’s fuelled Wall Street’s recent rally: that the Federal Reserve can pull off a perfect landing for the economy by slowing it enough to stifle high inflation but not so much that it causes a recession.
Winnebago Industries’ stock dropped 5.6 per cent after it also fell short of analysts’ profit expectations for the latest quarter. General Mills, which sells Progresso soup and Yoplait yogurt, reported stronger profit for the latest quarter than expected, but its revenue fell short as a recovery in its sales volume was slower than expected. Its stock fell 3.6 per cent. Still, a pair of reports showed the US economy may be in stronger overall shape than expected. Both confidence among consumers in December and sales of previously occupied homes in November improved more than economists had expected. Encouraging signs that inflation is cooling globally also continue to pile up.
