Asian shares fall in thin trading after rout on Wall Street
Benchmarks declined in Japan, South Korea and Australia. For holidays in China and other regions, trading was not open. A report showing that pandemic lockdowns in China have impacted factory activity, which is a key regional driver of growth, has been a source of concern.
The monthly purchasing managers’ index, released by China’s National Bureau of Statistics, fell to 47.4 in April, down from 49.5 in March on a 100-point scale. Numbers below 50 show activity contracting.
The COVID-19 outbreaks have impacted China’s factory activities and market demand, said the bureau’s statistician Zhao Qinghe. Some enterprises have reduced or stopped production due to disruptions in logistics and supply of raw materials and components.
Residents of Shanghai, China’s most populous city, spent most of April under lockdown. Beijing, the capital, is mass-testing millions.
Japan’s benchmark Nikkei 225 declined 0.1% in afternoon trading to 26,814.78. Australia’s S&P/ASX 200 dropped 1.2% to 7,347.00. South Korea’s Kospi shed 0.4% to 2,685.28. China closed trading on Labor Day, a national holiday.
In Ukraine civilians were evacuated from a steel plant in Mariupol, which was under constant bombardment by Russian forces. Many previous evacuation attempts have failed.
On Wall Street on Friday, steep losses for technology stocks pushed the S&P 500 down 3.6% to 4,131. 93, while the Nasdaq fell 4% to 12,334. 64, finishing April down 13.3% in its biggest monthly loss since 2008.
The Dow dropped 2.8% to 32,977. 21 and smaller company stocks also had a rough day. The Russell 2000 slid 2.8%, to 1,864.10.
Investors have been reviewing financial results from big tech companies, industrial firms and retailers and some disappointing results or outlooks from Apple, Google’s parent company and Amazon helped fuel the selling last week.
Retail giant Amazon posted its first loss since 2015, with the decline knocking more than $200 billion off its market value.
The Nasdaq composite, heavily weighted with technology stocks, has lost 21.2% this year.
Traders will be watching for the next steps of the U.S. Federal Reserve in fighting inflation. This week, the Fed is expected to announce a second round of rate increases. This means higher borrowing costs, at a time when consumers and investors are worried about inflation.
Prices for everything, from food to gasoline, have been rising since the pandemic. There has been a disconnect between high demand and low supplies. Inflation worries have only been exacerbated by Russia’s invasion in Ukraine.
In energy trading, benchmark U.S. crude lost 99 cents to $103. 70 a barrel in electronic trading on the New York Mercantile Exchange. It shed 67 cents to $104. 69 per barrel on Friday.
Brent crude, the international standard, fell 97 cents to $106. 17 a barrel.
In currency trading, the U.S. dollar edged up to 130. 36 Japanese yen from 129. 83 yen. The euro cost $1. 0522, inching down from $1.0546.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
I have been writing professionally for over 20 years and have a deep understanding of the psychological and emotional elements that affect people. I’m an experienced ghostwriter and editor, as well as an award-winning author of five novels.