Asian Shares Broadly Lower On Fed Tapering Talk

Asian Shares Broadly Lower On Fed Tapering Talk

October 5, 2021

Asian stocks fell broadly on Tuesday, with worries about the potential impact of a widening power shortage in China and Fed tapering signals denting sentiment.

Chinese markets advanced after the People’s Bank of China pledged to ensure a “healthy property market” amid the China Evergrande Group crisis.

The benchmark Shanghai Composite Index rose 19.39 points, or 0.5 percent, to settle at 3,602.22. Hong Kong’s Hang Seng Index surged up 291.61 points, or 1.2 percent, to 24,500.39.

China’s industrial profits continued to grow at a slower pace, as higher input prices as well as a shortage of materials lifted production costs, the National Bureau of Statistics said earlier in the day. Industrial profits increased 10.1 percent year-on-year in August following 16.4 percent annual growth in July.

Japanese shares ended slightly lower, dragged down by chipmakers and shippers. The Nikkei 225 Index dipped 56.10 points, or 0.2 percent, to 30,183.96 after having rallied over 7 percent so far this month in the run-up to the Liberal Democratic Party’s leadership election. The broader Topix closed 0.3 percent lower at 2,081.77.

Chip heavyweights led the losses, with Advantest tumbling 3.6 percent. Among shippers, Kawasaki Kisen Kaisha plunged 14.5 percent, Nippon Yusen slumped 8.2 percent and Mitsui OSK Lines lost 7 percent.

Inpex surged 4.2 percent and Japan Petroleum Exploration rose 1.3 percent as oil prices climbed for the sixth straight day on supply concerns.

In economic news, minutes of the Bank of Japan’s meeting on July 15 and 16 reiterated the need to stand pat on key stimulus tools amid sluggish inflation.

Australian markets fell sharply, with selling seen across the mining, banking, healthcare and retail sectors. Energy stocks continued to benefit from a rally in oil prices caused by supply shortages.

The benchmark S&P/ASX 200 Index tumbled 108.60 points, or 1.5 percent, to 7,275.60 after official data showed retail sales fell for a third straight month in August. The broader All Ordinaries Index ended down 109.60 points, or 1.4 percent, at 7,581.10.

Beach Energy soared 10.5 percent, a day after it signed a deal to sell liquefied natural gas to BP.

Seoul stocks lost ground as investors offloaded tech shares amid concerns over surging virus cases and a rise in U.S. treasury yields.

The benchmark Kospi slid 35.72 points, or 1.1 percent, to 3,097.92. Chip giant Samsung Electronics fell 1.8 percent, SK Hynix gave up 1 percent and Naver tumbled 2.6 percent.

Consumer confidence in South Korea picked up steam in September, the latest survey from the Bank of Korea showed today, with a Composite Consumer Sentiment Index score of 103.8 – up from 102.5 in August.

New Zealand shares declined amid a lack of major catalysts. The benchmark NZX-50 Index dropped 53.32 points, or 0.4 percent, to 13,174.38. Top stock Fisher & Paykel Healthcare gave up 2.6 percent and Fletcher Building lost 1.4 percent.

U.S. stocks ended mixed overnight and treasury yields rose as investors looked ahead to speeches from several Fed officials and kept a wary eye on the developments surrounding debt-laden China Evergrande.

In economic news, new orders for durable goods waltzed past analyst expectations, but much of the gain came from a big jump in aircraft orders.

The Dow edged up 0.2 percent, while the S&P 500 eased 0.3 percent and the tech-heavy Nasdaq Composite shed half a percent.

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