Shares in Asia slipped on Thursday as Wall Street experienced a slight downward drift after a rally that had propelled it 16% higher for the year thus far.
Hong Kong’s Hang Seng index dropped by 3% due to heavy selling of Chinese bank shares, prompted by Goldman Sachs’ downgrade citing concerns about the slowing economy and lenders’ exposure to debt. Japan’s Nikkei 225 also lost 1.7%. U.S. futures declined, and oil prices showed mixed movements.
Despite recent surges in share prices driven by signs of a stronger U.S. economy than initially feared, investor sentiment has been impacted by the possibility of further rate hikes. The focus for the U.S. market will now turn to the upcoming jobs data scheduled for release on Friday.
Investors are also keeping an eye on developments regarding tensions between the U.S. and China as Treasury Secretary Janet Yellen heads to Beijing for several days of meetings.
The Hang Seng shed 587 points to reach 18,522.43, while the Shanghai Composite index lost 0.5% to settle at 3,205.97. Tokyo’s Nikkei 225 index gave up over 600 points, closing at 32,729.96.
In Australia, the S&P/ASX 200 dropped by 1.3% to 7,160.70, and the Kospi in Seoul lost 0.7% to 2,560.14. India’s Sensex opened marginally higher, while shares fell in Taiwan and Bangkok.
On Wednesday, the S&P 500 slipped by 0.2% to 4,446.82, easing from its highest level since April 2022. The Dow fell 0.4% to 34,288.64, and the Nasdaq declined by 0.2% to 13,791.65.
A report released on Wednesday indicated that U.S. factory orders held steady in May, meeting expectations for some acceleration.
Several factors impacted individual companies on Wall Street. UPS saw a 2.1% decline as it seeks to reach a deal with the Teamsters union representing approximately 340,000 of its workers. Shares of Las Vegas Sands and Wynn Resorts, which generate significant revenue from Macau, both fell by at least 4.6%.
On a positive note, Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, rose by 1.9% as it appears set to unveil a new app that mimics Twitter. This rise adds to an already remarkable year, during which Meta Platforms has soared by 144.6%.
There is growing hope that inflation may be cooling enough to prompt the Federal Reserve to halt its rate hikes, which aim to counter inflation by slowing down the overall economy. While the Fed has been hinting at raising rates later this month and possibly once more this year, it could leave the U.S. stock market in a holding pattern as investors await the potential onset of a long-predicted recession. Clues regarding the market’s direction may emerge during the upcoming earnings reporting season, as companies disclose their springtime profits to investors.
Yields in the bond market showed mixed movements. The yield on the 10-year Treasury rose to 3.93% from Monday’s 3.86% (bond trading ended early on Monday ahead of the Independence Day holiday). The 10-year yield plays a crucial role in setting rates for mortgages and other significant loans. Conversely, the two-year Treasury yield, which is influenced by expectations for the Federal Reserve, remained steady at 4.94%.
In other market activities, U.S. benchmark crude oil shed 14 cents to trade at $71.65 per barrel on the New York Mercantile Exchange. On Wednesday, it gained $2 per barrel, closing at $71.69. Brent crude, used as the basis for international trading, gave up 28 cents, reaching $76.37 per barrel.
The dollar weakened against the Japanese yen, falling to 144.17 yen from 144.64 yen. Similarly, the euro dropped to $1.0839 from $1.0857.
Featured Image: Freepik
Author Kristen Moran 
