Asian Stock Exchanges Mixed, Investors Await Inflation Data

 

Asia Pacific stock exchanges varied in stock trading Monday (25/9/2023). (AP Photo/Eugene Hoshiko)

Singapore - Asia Pacific stock exchanges varied in stock trading Monday (25/9/2023). This is because investors are waiting for inflation data from all regions this week.

Quoted from CNBC, Singapore and Australia will report August inflation this week. Meanwhile, Japan will release Tokyo inflation data. Capital region inflation data is seen as a key indicator of national trends.

In Japan, the Nikkei 225 index rose 0.24 percent, and the Topix index added 0.16 percent. South Korea's Kospi index slipped 0.24 percent and the Kosdaq index fell 0.94 percent.

The ASX 200 index weakened 0.45 percent at the start of the trading session. Hang Seng Index futures were at 18,040, opening weaker than the last trading close at 18,057.45.

In trading Friday, September 22 2023 on Wall Street, the three benchmark indices weakened for four consecutive days as investors continued to grapple with signals from the Federal Reserve (the Fed) that interest rates would be kept high for longer. The S&P 500 and Nasdaq indexes recorded their worst records since March 2023.

The Dow Jones index weakened 0.31 percent, while the S&P 500 index fell 0.23 percent and the Nasdaq index weakened 0.09 percent.

As previously reported, the Central Bank of Japan kept interest rates at -0.1 percent and limited the yield on 10-year Japanese government bonds at around zero.

Governor of the Bank of Japan (BoJ), Kazuo Ueda, said that very loose monetary policy is needed until Japan sees sustainable inflation of 2 percent. Japanese inflation has remained above target since April 2022 with the latest inflation figure of 3.2 percent in August. This was quoted from CNBC, Friday, September 22 2023.

On the Asian stock exchange, the Nikkei 225 index weakened 0.52 percent to 32,402.41. The Topix index slipped 0.3 percent to 2,376.27. The Hang Seng Index added 2.12 percent. The CSI 300 index rose 1.8 percent to 3,738.93.

In Australia, the ASX 200 index rose 0.05 percent to 7,068.8. South Korea's Kospi index slipped 0.27 percent to 2,508.13. The Kosdaq index slumped 0.39 percent to 857.35, its lowest level since May 31.

Wall Street is sluggish at the weekend, investors are worried that the Fed will increase interest rates

In this May 11, 2007 file photo, the Wall Street sign is installed near the flag-draped facade of the New York Stock Exchange. (Richard Drew/AP Photo)

Previously, the United States (US) stock market or Wall Street weakened in trading on Friday, September 22 2023. The Dow Jones index experienced the largest correction among the three other reference indices.

At the close of Wall Street trading, the Dow Jones index fell 106.58 points or 0.31 percent to 33,963.84. The S&P 500 index slipped 0.23 percent to 4,320.06. The Nasdaq index fell 0.09 percent to 13,211.81. This was quoted from CNBC, Saturday (23/9/2023).

Meanwhile, Ford shares rose 1.9 percent after sources told CNBC the auto giant was making progress in negotiations with the striking United Auto Workers union. Stellantis shares fell, followed by General Motors which slipped.

Wall Street's decline on Friday this week marked the fourth consecutive day of correction for the three benchmark indices. The correction in the three benchmark indices occurred because investors reacted to signals from the Federal Reserve (the Fed) or the US central bank that it would maintain its benchmark interest rate higher for a longer period of time.

The S&P 500 and Nasdaq indexes fell 2.9 percent and 3.6 percent respectively this week. This marks three consecutive weeks of weak performance and weekly performance since March 2023. The Dow Jones Index fell 1.9 percent.

On the other hand, US government bond yields soared after the central bank predicted another interest rate hike in 2023. The benchmark 10-year government bond yield jumped to the highest level since 2007 this week. Meanwhile, the interest rate on 2-year bonds touched its highest level since 2006.

Oil Prices Have the Potential to Strengthen

Illustration of World Oil Prices Today. Photo: AFP

“This is starting to cause concerns for investors. "Investors are starting to get used to higher interest rates and what that means for risky assets in the future," said Allianz Investment Management Senior Investment Strategist, Charlie Ripley.

Concerns are also increasing that a government shutdown could reduce consumer confidence and further slow the economy.

“Investors are currently still worried about the government shutdown. "The market just waits to see when it happens and then tries to ignore the duration," said Harris Financial Managing Partner Jamie Cox.

On the other hand, JPMorgan predicts that oil prices will strengthen again. Analyst Christyan Malek raised the rating of the entire global energy sector to overweight in research on Friday this week. "The energy supercycle could ultimately raise the price of Brent crude oil to USD 150 per barrel," he said.