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Updated January 17th, 2024 at 19:28 IST

Asian shares mostly fall after Wall Street drop, Tokyo hits new 34-year high

Chinese economic data indicated a growth of 5.2 per cent for 2023, surpassing the government's target of around 5 per cent.

Business Desk
Asian currency market
Asian currency market | Image:Unsplash
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Wall Street drop: Asian markets saw a mixed performance on Wednesday, with Japan's Nikkei 225 briefly reaching a 30-year high while others experienced declines following a lacklustre return to trading on Wall Street. Japan's benchmark Nikkei 225 gained 0.2 per cent, reaching 35,701.41, driven by semiconductor-related shares and a favourable exchange rate. Australia's S&P/ASX 200 slipped 0.3 per cent, South Korea's Kospi dropped 2.0 per cent, Hong Kong's Hang Seng dove nearly 3.1 per cent, and the Shanghai Composite shed 0.9 per cent. 

Chinese economic data released indicated a growth of 5.2 per cent for 2023, surpassing the government's target of around 5 per cent, aided by a rebound from 2022's 3 per cent GDP due to the impact of COVID-19 and lockdowns. Investors are closely watching upcoming earnings reports and central bank actions for market cues.

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Wall Street decline 

On Wall Street, the S&P 500 fell 0.4 per cent, the Dow Jones dropped 0.6 per cent, and the Nasdaq composite sank 0.2 per cent. Spirit Airlines faced a 47.1 per cent decline after a US judge blocked its takeover by JetBlue Airways. JetBlue, however, rose 4.9 per cent. Banks reported mixed results, with Morgan Stanley falling 4.2 per cent due to a legal matter and a special assessment affecting its pretax earnings. Goldman Sachs edged 0.7 per cent higher after exceeding Wall Street forecasts.

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Analysts expect modest profit growth in the fourth quarter for S&P 500 companies, given rising costs amid high inflation. However, optimism prevails for 2024, with a forecasted 11.8 per cent growth in earnings per share. Expectations of rate cuts by the Federal Reserve in 2024 have contributed to the S&P 500's recent rally.

In the bond market, yields rose after Fed Gov. Christopher Waller indicated that "policy is set properly" on interest rates. Traders adjusted expectations, pushing some bets for the first rate cut to May instead of March. Energy trading saw benchmark US crude at $71.81 a barrel and Brent crude at $77.73 a barrel. The US dollar edged up against the Japanese yen and the euro, reflecting a dynamic market influenced by interest rate expectations.

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(with Reuters inputs)

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Published January 17th, 2024 at 19:28 IST

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