Asian stocks experienced a decline on Wednesday as they absorbed Japanese and Australian business data. Meanwhile, U.S. stocks remained relatively stable as the earnings reporting season kicked off for major companies.
U.S. futures were down while oil prices saw an increase.
The Nikkei 225, Japan’s benchmark, dropped 1.1% to 39,154.85, with the Japanese yen reaching its highest level in months ahead of the Bank of Japan’s policy decision next week.
Concerns about the BOJ potentially raising interest rates and the possibility of the Federal Reserve cutting rates have bolstered the yen, which has been struggling amid widening rate differentials between the U.S. and Japan. The dollar was trading at 154.68 yen on Wednesday, down from 155.59 yen the previous day.
Recent business data revealed that Japan’s factory activity contracted in July due to weak demand while services saw an uptick, contributing to overall growth in the private sector.
In other parts of Asia, the Hang Seng in Hong Kong declined by 1.1%, while the Shanghai Composite dropped by 0.5%. Australia’s S&P/ASX 200 also saw a slight decrease, attributed to weaker growth in the services sector.
South Korea’s Kospi fell by 0.6%, driven by a 2.2% decline in Samsung Electronics following unsuccessful negotiations with its worker’s union.
On Tuesday, U.S. stock indices like the S&P 500 and the Dow Jones Industrial Average recorded minor losses, while the Nasdaq composite dipped by 0.1%. However, smaller stocks in the Russell 2000 continued to perform well, rising by 1%.
The mixed trading environment coincided with the reporting of quarterly results by various companies. Analysts are optimistic about strong profit growth for S&P 500 companies, with expectations running high.
UPS faced a significant drop of 12.1% after reporting weaker-than-expected profits for the spring, while Nvidia also impacted the market negatively.
Despite challenges in the housing industry due to high mortgage rates, there are expectations of rate cuts by the Federal Reserve to provide relief to the economy and financial markets.
In the commodities market, U.S. benchmark crude oil saw an increase, while Brent crude also rose. The euro slightly declined against the dollar.
Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
