Asia report: Markets follow Wall Street into the red

24th Jul 2024 10:29

(Sharecast News) - Asia-Pacific markets faced declines on Wednesday as investors evaluated business activity data from Japan and Australia.

Tech stocks were also in focus, after Google parent Alphabet and Tesla reported their earnings on Wall Street overnight, with Tesla falling short of forecasts.

"Most Asian stock markets are experiencing a decline, influenced by the negative performance of Wall Street," said TickMill market analyst Patrick Munnelly.

"Traders are feeling uncertain about the market's future due to recent fluctuations and are hesitant to make big decisions before the release of important US GDP and inflation data later in the week.

"The Japanese stock market is showing a slight decline after a small increase in the previous session."

Munnelly said that came after Wall Street showed negative trends overnight.

"The Nikkei 225 is dropping below the 39,500 level as traders respond to recent business activity data.

"While some index heavyweights and financial stocks are weak, there are gains in technology stocks."

Markets a sea of red across the Asia-Pacific region

Japan's major indices saw significant losses, with the Nikkei 225 dropping 1.11% to 39,154.85 and the Topix falling 1.42% to 2,793.12.

Notable declines on Tokyo's benchmark included Mitsubishi Motors, down 7.39%; Isuzu Motors, off 5.44%; and Kawasaki Kisen Kaisha, finishing 4.65% weaker.

Chinese markets also experienced a downturn, as the Shanghai Composite decreased by 0.46% to 2,901.95, and the Shenzhen Component fell by 1.32% to 8,493.10.

Stocks such as Heilongjiang Transport Development, Shanghai Jin Jiang International Industrial Investment, and Fulongma Group each plummeted by 10%.

The Hang Seng Index in Hong Kong dropped 0.91% to 17,311.05.

Among the hardest hit in the special administrative region were Nongfu Spring, down 7.1%; Chow Tai Fook Jewellery Group, off 6.57%; and China Resources Beer Holdings, which lost 6.3%.

South Korea's Kospi slipped by 0.56% to 2,758.71, with some of the biggest declines coming from Hyundai Doosan Infracore, Posco International, and Doosan Robotics, which were down 7.81%, 5.88% and 4.43%, respectively.

The S&P/ASX 200 in Australia saw a modest decline of 0.09% to 7,963.70.

Telix Pharmaceuticals, Flight Centre Travel Group, and Iluka Resources faced notable losses, dropping 7.19%, 4.74%, and 4.69% respectively.

Australia's private sector growth decelerated in July, contributing to the market's negative performance.

New Zealand's S&P/NZX 50 was the region's odd one out, rising 0.85% to 12,530.99, with gains led by Air New Zealand, up 5.17%; Stride Property, ahead 4.1%; and Investore Property, which rose 3.6%.

In currency markets, the dollar was last down 0.53% on the yen to trade at JPY 154.77, while it rose 0.32% and 0.43% against the Aussie and Kiwi to AUD 1.5165 and NZD 1.6861, respectively.

On the commodities front, Brent crude futures were last up 0.88% on ICE to $81.72 per barrel, and the NYMEX quote for West Texas Intermediate went up 0.91% to $77.66.

Japan factory activity contracts, business activity nearly stagnates in Australia

In economic news, Japan's factory activity slightly contracted in July, with declines in output and new orders amid persistent inflation pressures.

The au Jibun Bank flash Japan manufacturing purchasing managers' index (PMI) dipped to 49.2 from June's 50, falling below the threshold that separates growth from contraction for the first time in three months.

That contraction was driven by the weakest new orders since February and a reversal in output growth seen in June.

However, the service sector's expansion helped Japan's overall private sector activity return to growth in July.

In Australia, business activity neared stagnation in July, with the Judo Bank flash PMI showing mixed results.

The flash Australia composite PMI output index fell to 50.2 from June's 50.7, marking a six-month low, and the services PMI business activity index also reached a six-month low at 50.8, down from 51.2 in June.

At the same time, the manufacturing PMI output index dropped to a four-month low of 46.3, though the overall manufacturing PMI edged up to a two-month high of 47.4 from 47.2 in June.

Australian companies experienced a second consecutive month of declining new orders, despite a slight uptick in employment and accelerating inflation rates.

Reporting by Josh White for Sharecast.com.