HONG KONG, April 30 — Asian markets turned lower today as investors struggled to take the lead from a record performance on Wall Street and following below-forecast Chinese factory data.
News that US growth had accelerated more than six per cent in the first quarter and jobless claims continued to fall to new pandemic-era lows reinforced the view that the recovery in the world’s top economy was well on track.
That came after the head of the Federal Reserve had reiterated the bank’s commitment to keeping monetary policy ultra-loose until it is satisfied the economy is strong enough.
In response the S&P 500 hit another record, helped by a string of outsized earnings from tech heavyweights including Apple, Facebook and Google.
But after a broadly upbeat week Asia was unable to build on the positive run, with most markets in negative territory.
Hong Kong led the losses, shedding two per cent, with tech firms including JD.com, Meituan and Tencent taking a hit after China ramped up its crackdown on the sector by summoning 13 companies to call for changes to their fintech operations. Shanghai also fell.
The group was told to heed the case of ecommerce titan Alibaba, which was hit with a record US$2.78 billion fine by regulators for abusing its dominant market position.
Adding to the selling pressure was a report showing slowing growth in China’s factory activity owing to a global shortage of shipping containers, supply chain problems and rising freight rates.
There were also losses in Tokyo, Sydney, Seoul, Mumbai, Jakarta and Manila, though Singapore and Wellington edged up.
Paris rose in the first few minutes of trade after data showed the French economy returned to growth in the first quarter. London and Frankfurt also rose at the open.
“The recovery in Asia remains on track, as it does in the US, but is uneven,” said OANDA’s Stephen Innes. “Covid-19 remains a threat in Asia. Logistical bottlenecks, and semi-conductor shortages, are now a global issue, making their presence felt everywhere.
“That may mollify the pace of global recovery in developed countries but will not derail it. The unintended side effect will be a rise in prices and thus inflation.”
Still, observers remain upbeat about the outlook as vaccinations pick up and lockdowns are eased, while vast sums of government and central bank cash swirl around the economy.
“All evidence still points to continued support from both fiscal and monetary policy against a backdrop of accelerating corporate earnings,” Mark Haefele, at UBS Global Wealth Management, said.
“This reinforces our view that markets can advance further, with cyclical parts of the market—such as financials, energy, and value stocks—likely to benefit most from the global upswing.”
Key figures around 0810 GMT
Tokyo — Nikkei 225: DOWN 0.8 per cent at 28,812.63 (close)
Hong Kong — Hang Seng Index: DOWN 2.0 per cent at 28,724.88 (close)
Shanghai — Composite: DOWN 0.8 per cent at 3,446.86 (close)
London — FTSE 100: UP 0.3 per cent at 6,984.18
Euro/dollar: DOWN at US$1.2101 from US$1.2118 at 2130 GMT
Pound/dollar: DOWN at US$1.3912 from US$1.3940
Euro/pound: UP at 86.98 pence from 86.91 pence
Dollar/yen: DOWN at 108.89 yen from 108.92 yen
West Texas Intermediate: DOWN 0.8 per cent at US$64.52 per barrel
Brent North Sea crude: DOWN 0.5 per cent at US$68.19 per barrel
New York — Dow: UP 0.7 per cent at 34,060.36 (close) — AFP
