Asian stocks fell mainly on Tuesday as concerns over China rocked investor optimism after mixed results on Wall Street.
Japan’s benchmark Nikkei 225 lost 0.3% to 30,139.65. The Australian S & P / ASX 200 slipped 1% to 7,314.10. South Korea’s Kospi lost 0.8% to 3,109.07. Hong Kong’s Hang Seng rose 1.7% to 24,619.28. The Shanghai Composite Index climbed 0.3% to 3,594.18.
An electricity crisis in parts of China has closed factories and left some households without electricity in a bid to meet official energy consumption targets. This could have global repercussions, including on the supplies needed for manufacturing across Asia, just before the end-of-year shopping season.
The woes add to the shortages of parts and raw materials that are already plaguing regional manufacturing due to supply disruptions caused by the coronavirus pandemic.
Analysts believe China’s power shortage could be prolonged as demand for coal and natural gas increases during the winter.
Another lingering market concern originating in China is the possible collapse of one of China’s largest real estate developers, Evergrande Group, which is struggling to avoid default on billions of dollars in debt.
“Crucially, the risks of contagion are significant due to transmission within the real estate industry due to similar risks to homebuyers and banks via on-balance sheet exposures,” said Vishnu Varathan of the Asia Treasury Department. and Oceania from Banque Mizuho. “The point is, Evergrande is at best a risk that has temporarily eased but is far from over.”
The vote for the leader of the ruling party in Japan, scheduled for Wednesday, also weighed on Tokyo trade, analysts said, as players took a wait-and-see stance. Four candidates are in the race to replace Prime Minister Yoshihide Suga, who is stepping down after a year in office. No major changes in the economy or foreign policy are expected, as the pro-American Liberal Democratic Party has ruled Japan almost continuously over the past decades.
Major Wall Street stock indexes ended mixed, with losses at tech and healthcare companies outpacing gains elsewhere in the market.
The S&P 500 fell 0.3% to 4,443.11, ending a three-day winning streak for the benchmark, which posted its first weekly gain in three weeks last week. The Nasdaq fell 0.5% to 14,969.97, while the Dow managed a gain of 0.2% to 34,869.37. The Russell 2000 rose 1.5% to 2,281, a sign that investors are still confident about future economic growth.
The 10-year Treasury yield remained stable at 1.49%. It was at 1.31% a week ago, as market nervousness prompted investors to move money into bonds, reducing their yield. He’s been climbing for a week.
The yield influences the interest rates on mortgages and other consumer loans, so when it rises, it allows lenders to charge higher rates. Bank of America gained 2.7%.
US markets have had a turbulent month so far and the S&P 500 is set to lose 1.8% in September, which would mark the first monthly loss since January. Investors have tried to gauge how much room for growth the economy has amid waves of COVID-19 that are dragging down consumer spending and job growth, while inflation remains a concern.
Consumer spending has been the main driver of the economic recovery and has been partly held back by the increase in COVID-19 cases due to the highly contagious delta variant, which remains a major concern in Asia.
In energy trading, benchmark US crude added 25 cents to $ 75.70 a barrel in electronic trading on the New York Mercantile Exchange. It gained $ 1.47 to $ 75.45 a barrel on Monday.
Brent crude, the international standard, rose 21 cents to $ 79.74 a barrel.
In currency trading, the US dollar rose from 110.99 yen to 111.16 Japanese yen. The euro cost $ 1.1695, compared to $ 1.1700.
AP Business editors Damian J. Troise, Alex Veiga and Ken Sweet contributed.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama