Stock market today: Asian shares track decline on Wall St as Japan cuts GDP estimate for 2nd quarter
Shares fell Friday in Asia after Japan reported its economy grew less than earlier estimated in the last quarter.
Oil prices declined, while US futures edged higher.
Japan, the world's third largest economy, grew at a 4.8 per cent annual pace in the April-June quarter, below the earlier estimate of 6 per cent growth, according to data released on Friday.
Much of that growth was driven by exports, which rose nearly 13 per cent, while private consumption fell 2.2 per cent on weak investment spending. A separate report showed that wages declined in July for the 16th straight month, falling 2.5 per cent from a year earlier.
Tokyo’s Nikkei 225 index dropped 0.9 per cent to 32,681.31, while the Kospi in Seoul lost 0.4 per cent to 2,537.69.
Hong Kong’s markets were closed due to a tropical storm.
The Shanghai Composite index pulled back 0.5 per cent to 3,105.54, while the S and P/ASX 200 fell 0.4 per cent to 7,154.50.
On Thursday, Wall Street slipped in mixed trading as the threat of high interest rates continues to dog Big Tech stocks.
The S and P 500 fell 0.3 per cent to 4,451.14, for its third straight loss. The Nasdaq composite was hit particularly hard by the drop for tech stocks, sinking 0.9 per cent to 13,748.83.
The Dow Jones Industrial Average held up better than the rest of the market because it has less of an emphasis on tech. It rose 0.2 per cent to 34,500.73.
Stocks felt pressure from the bond market, where yields rose earlier in the week after a report showed stronger growth for US services industries last month than economists expected. Yields remained high after a report on Thursday said fewer US workers applied for unemployment benefits last week than expected.
While such reports are encouraging for the economy, indicating a long-predicted recession is not near, they could also keep conditions humming strongly enough to push upward on inflation.
The Federal Reserve has already hiked its main interest rate to the highest level in more than two decades in hopes of slowing the economy enough to drive inflation back down to its 2 per cent target.
It’s come close, and inflation has cooled from its peak above 9 per cent last summer. But the worry is that the last percentage point of improvement may be the toughest for the Fed.
High interest rates drag stock prices, especially those of technology companies and others that have been bid up on expectations for high growth far in the future.
Many of those stocks also tend to be the most influential on the S and P 500 because they’re the biggest.
Apple, the dominant force on Wall Street because it’s the most valuable stock, fell 2.9 per cent after a 3.6 per cent drop a day before.
Nvidia sank 1.7 per cent to bring its loss for the week so far to 4.7 per cent. It and a cohort of other stocks in the artificial-intelligence industry have soared this year on expectations that AI could mean explosive future growth in profits.
C3.ai tumbled 12.2 per cent after it said late Wednesday that it no longer expects to be profitable in its final fiscal quarter of the year, as it invests more in opportunities around generative AI.
Analysts also pointed to disappointing profit margin levels for the company during its latest quarter, which was the first of its fiscal year.
Power companies and other stocks seen as steadier investments also held up better than the rest of the market. Utility stocks in the S and P 500 rose 1.3 per cent as a group. That was nearly double the gain of any of the other 10 sectors that make up the index.
In other trading on Friday, US benchmark crude oil shed 48 cents to USD 86.39 a barrel in electronic trading on the New York Mercantile Exchange. It added 67 cents on Thursday.
Brent crude, the pricing basis for international trading, declined 40 cents to USD 89.52 a barrel.
The dollar slipped to 147.19 Japanese Yen from 147.30 late Thursday.
The Euro was trading at USD 1.0718, up from USD 1.0697.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)