Asia report: Markets close weaker on back of US tech rout
Markets in Asia closed weaker on Wednesday, following another dire session on Wall Street overnight, as investors digested the latest inflation figures out of China.
In Japan, the Nikkei 225 was down 1.04% at 23,052.54, as the yen weakened 0.02% against the dollar to last tradt at JPY 106.05.
Of the major components on the benchmark index, automation specialist Fanuc was down 0.82%, fashion firm Fast Retailing lost 1.06%, and technology conglomerate SoftBank Group slid 2.87%.
The broader Topix index ended its session off 0.96% in Tokyo, settling at 1,605.40.
On the mainland, the Shanghai Composite was down 1.86% at 3,254.63, and the smaller, technology-heavy Shenzhen Composite was off 3.22% at 2,175.77.
Fresh inflation data out of China showed a 2% decline in the country’s producer price index for August, while the consumer price index was ahead 2.4% year-on-year, but falling back from 2.7% in July.
Both figures from the National Bureau of Statistics were in line with the expectations of economists polled by Reuters.
“The decline [in consumer inflation] broke two straight months of acceleration, as food price inflation resumed its downtrend thanks to the renewed normalisation in pork prices from their swine flu peaks,” said Pantheon Macroeconomics senior Asia economist Miguel Chanco.
“The pull from base effects due to last year’s spike also intensified last month, and this drag is likely to remain particularly strong heading into the fourth quarter.
“We estimate that a continued moderation in the drag from energy costs offset the downward impact of food prices on the August headline by a tenth.”
South Korea’s Kospi lost 1.09% to close at 2,375.81, while the Hang Seng Index in Hong Kong slipped 0.63% to 24,468.93.
Both of the blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 0.51% and chipmaker SK Hynix losing 2.64%.
The negative moves in Asian equities came after another technology-led sell-off on Wall Street overnight, where the Nasdaq Composite lost 4.1%, making for losses over the last three sessions of 10%.
“The rout was not confined just to equity markets,” noted Oanda senior Asia Paciic market analyst Jeffrey Halley.
“Oil suffered multiple well bursts with prices leaking in an uncontrolled manner.
“On currency markets, the US dollar leapt higher with a number of major currencies, especially euro, breaking significant supports versus the greenback.”
Halley said US bond yields also tracked slightly lower.
Oil prices were higher at the end of the Asian session, with Brent crude last up 1.38% at $40.33 per barrel, and West Texas Intermediate rising 1.96% to $37.48.
In Australia, the S&P/ASX 200 slid 2.15% to 5,878.60, as the sunburnt country’s big four banks slipped into the red.
Australia and New Zealand Banking Group was down 3%%, Commonwealth Bank of Australia lost 2.48%, National Australia Bank was off 2.57%, and Westpac Banking Corporation was 3.34% weaker.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 1.32% weaker at 11,739.11, with the country’s major listed exporters in the red.
Specialist dairy company A2 Milk was down 2.41%, and medical devices maker Fisher & Paykel Healthcare was off 0.59%.
Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.3% at AUD 1.3821, and the Kiwi advancing 0.23% to NZD 1.5074.