Asia report: Most markets fall as Japan's trade deficit widens

21st Aug 2024 09:13

(Sharecast News) - Asia-Pacific markets were mostly lower on Wednesday, following a pullback in US markets overnight, where the S&P 500 and Nasdaq Composite ended their eight-day winning streak.

The region's mixed performance was also influenced by Japan's latest trade data, which showed a shift to a trade deficit.

"Asian stock markets are primarily trading lower on Wednesday, as a result of the broad negative signals from global markets overnight," said TickMill market analyst Patrick Munnelly.

"Japan's Nikkei index declined by 1% at the start of trading, as its recovery from the sharp drop in early August faces resistance around the 38,000 level, and the strengthening of the Japanese yen further dampened investor sentiment."

Munnelly said traders were taking profits following the recent recovery rally in the markets.

"In addition, they appeared to be hesitant to make substantial bets in anticipation of critical events that could potentially affect the interest rate outlook later this week."

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In Japan, the Nikkei 225 declined by 0.29% to close at 37,951.80, while the Topix index fell 0.21% to 2,664.86.

Notable losses on Tokyo's benchmark were seen in Shiseido, which plummeted 5.94%, and Furukawa Electric, which dropped 3.75%.

China's markets also saw declines, with the Shanghai Composite down 0.35% at 2,856.58 and the Shenzhen Component falling 0.28% to 8,229.75.

Major losers included Anzheng Fashion Group, which fell sharply by 10.04%, and Qijing Machinery, which decreased by 6.83%.

The semiconductor sector was also hit hard, with GigaDevice Semiconductor Beijing losing 6.61%.

Hong Kong's Hang Seng Index dropped 0.69% to 17,391.01.

E-commerce giant JD.com saw a significant drop of 8.73%, while CSPC Pharmaceutical Group and China Overseas also posted losses, falling 5.65% and 3.03%, respectively.

South Korea's Kospi bucked the regional trend, gaining 0.17% to 2,701.13.

The rise was driven by strong performances in the energy sector, with LG Energy Solution surging 6.06% and Samsung SDI increasing by 5.63%.

Australia's S&P/ASX 200 also edged up by 0.16% to 8,010.50, led by a massive 18.36% jump in Wisetech Global and a 15.79% rise in Charter Hall Group.

Brambles added 9.25%, contributing to the overall positive performance.

In New Zealand, the S&P/NZX 50 fell 0.44% to 12,502.97.

The market was dragged down by Sky Network Television, which lost 4.9%, along with Scales Corporation and Eroad, which dropped 3.89% and 3.68%, respectively.

In currency markets, the dollar was last up 0.58% on the yen to trade at JPY 146.10, as it increased 0.12% against the Aussie to AUD 1.4843, and climbed 0.24% on the Kiwi, changing hands at NZD 1.6289.

Oil prices saw modest gains, with Brent crude futures last up 0.23% on ICE at $77.38 per barrel, and the NYMEX quote for West Texas Intermediate ahead 0.22% at $73.33.

Japan trade deficit widens after July import and export data

In economic news, Japan recorded a significant trade deficit in July, as imports grew faster than exports, leading to a wider gap than economists had anticipated.

According to fresh data, Japan's exports increased by 10.3% year-on-year, falling short of the 11.4% growth forecast by economists polled by Reuters.

Meanwhile, imports surged by 16.6%, surpassing the expected 14.9% increase.

The imbalance resulted in a trade deficit of JPY 621.84bn - nearly double the JPY 330.7bn deficit that analysts had predicted.

Reporting by Josh White for Sharecast.com.