logo
Plus   Neg
Share
Email

Asian Shares Fall On Economic Recovery Concerns

asiancommentary dec17 17sep20 lt

Asian stocks fell broadly on Thursday amid worries about the strength of the economic recovery after the U.S. Federal Reserve left interest rates unchanged and signaled rates are likely to remain at near-zero levels through 2023.

In his post-meeting press conference, Federal Reserve Chairman Jerome Powell cautioned that the pace of economic recovery is expected to slow and urged for fiscal stimulus from Congress to sustain the economic recovery.

Shares in China and Hong Kong extended losses from the previous session after the Federal Reserve offered a cautious outlook on the U.S. economy.

China's Shanghai Composite Index declined 13.49 points, or 0.4 percent, to finish at 3270.44, while Hong Kong's Hang Seng Index tumbled 384.78 points or 1.6 percent to 24,340.85.

Japanese shares fell even as the Bank of Japan maintained its massive monetary policy stimulus and slightly lifted its assessment about the economy after Yoshihide Suga took charge as Japan's new Prime Minister.

The Policy Board of the BoJ headed by Haruhiko Kuroda voted 8-1 to retain the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.

The benchmark Nikkei 225 Index slid 156.16 points, or 0.7 percent, to close at 23,319.37, and the broader Topix dipped 5.95 points or 0.4 percent to 1,638.40. Market heavyweight SoftBank Group and Fast Retailing lost 1.3 percent percent each.

Sony said it will launch the PlayStation 5 on November 12 in seven key markets, including Japan and the U.S. The company's shares dropped 0.9 percent.

Shares of Hitachi declined 0.6 percent after the company pulled out of a nuclear power plant project in Wales, citing a worsening investment environment due to the impact of COVID-19.

Australian stocks closed notably lower despite the release of data showing an unexpected drop in Australia's unemployment rate for August.

Meanwhile, the Organisation for Economic Cooperation and Development projected a smaller economic contraction for Australia this year, but lowered its growth forecast for Australia in 2021.

The benchmark S&P/ASX 200 Index lost 72.90 points, or 1.2 percent, to close at 5,883.20, and the broader All Ordinaries Index fell 77.70 points, or 1.3 percent, to 6,069.20.

In the tech space, Afterpay tumbled 5.4 percent, WiseTech Global dropped 4.0 percent and Appen lost 2.7 percent after their U.S. peers fell overnight.

Among the major miners, Fortescue Metals dropped 6.4 percent, Rio Tinto slid 3.4 percent and BHP Group lost 1.8 percent.

BHP will face a parliamentary inquiry on Thursday investigating the destruction of ancient heritage sites in Western Australia by its peer Rio Tinto.

On the economic front, the Australian Bureau of Statistics said that the jobless rate in Australia came in at a seasonally adjusted 6.8 percent in August. That blew away expectations for 7.7 percent and was down from 7.5 percent in July.

The Australian economy added 111,000 jobs last month to 12,583,400, again shattering expectations that called for a loss of 50,000 jobs following the addition of 114,700 jobs in the previous month.

New Zealand shares declined after data showed that the country's GDP tumbled 12.2 percent in the second quarter of 2020, marking New Zealand's largest single-quarter decline on record. However, that actually beat forecasts for a decline of 12.8 percent following the 1.6 percent drop in the previous three months.

The benchmark NZX 50 Index closed down 37.58 points, or 0.3 percent, at 11,777.13. Fisher & Paykel Healthcare fell 1.7 percent and A2 Milk slid 1.6 percent.

Seoul stocks extended losses to a second consecutive day. The benchmark Kospi lost 29.75 points, or 1.2 percent, to close at 2,406.17.

Market bellwether Samsung Electronics fell 2.5 percent and chemical maker LG Chem tumbled 6.1 percent, while chipmaker SK Hynix added 0.9 percent.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT