ECONOMY

Asian stocks follow Wall Street lower before US Fed release

US stocks fell Tuesday after another slide in bond yields and a mixed batch of corporate earnings. Financial sector stocks led the declines. (File photo: AFP)

Asia stock markets followed Wall Street lower Wednesday as investors looked ahead to a speech by the Federal Reserve chairman for signs of possible plans for more US interest rate cuts.

Benchmarks in Tokyo, Shanghai and Australia declined while South Korea advanced.

US stocks fell Tuesday after another slide in bond yields and a mixed batch of corporate earnings. Financial sector stocks led the declines.

Investors looked ahead to the Fed’s release Wednesday of notes from its policymaking meeting last month and a speech Friday by chairman Jerome Powell.

Markets have “entered a holding pattern” ahead of Powell’s speech at an annual gathering in Jackson Hole, Wyoming, said Jeffrey Halley of Oanda in a report.

Investors expect Powell to signal the Fed “is about to embark on a reinvigorated wave of easing,” said Halley. However, he said US data “simply does not support the need for an aggressive easing cycle.”

The Shanghai Composite Index lost 0.1 percent to 2,875.63 and Tokyo’s Nikkei 225 shed 0.4 percent to 20,597.21. Hong Kong’s Hang Seng declined 0.3 percent to 26,161.92.

Seoul’s Kospi gained 0.2 percent to 1,965.02 while Sydney’s S&P-ASX 200 fell 1 percent to 6,477.60. Taiwan and Indonesian markets advanced while New Zealand and Singapore retreated.

On Wall Street, the benchmark Standard & Poor’s 500 index snapped a three-day winning streak and fell 0.8 percent to 2,900.51. The Dow Jones Industrial Average slid 0.7 percent to 25,962.44. The Nasdaq composite dropped 0.7 percent to 7,948.56.

The US market has been volatile this month as investors try to parse conflicting signals on the US economy and determine whether a recession is on the horizon. A key concern is that the US-Chinese tariff war will weigh on global economic growth.

Some chipmakers rose on Monday that the Trump administration delayed enforcement of export curbs on sales of US technology Chinese telecom equipment maker Huawei Technologies Ltd. Qualcomm added 1.6 percent.

Last week, many stock indexes around the world hit their lowest points of the year before rallying. Analysts say the concerns that drove that sell-off could resurface at any time.

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Last Update: Wednesday, 21 August 2019 KSA 07:32 - GMT 04:32
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