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Asia-Pacific markets trade mostly lower following overnight losses on Wall Street

Soegeefx AppsAsia MarketAsia-Pacific markets trade mostly lower following overnight losses on Wall Street

Key Points

  • Overnight, the Bank of England hiked interest rates on Thursday for the first time since the pandemic started.
  • The European Central Bank further cut its bond purchases overnight but vowed to continue its unprecedented monetary policy support for the euro zone economy into 2022.
  • The Bank of Japan is due to announce its monetary policy decision Friday and analysts say they do not expect any substantive changes.

A currency dealer monitors exchange rates in a trading room at KEB Hana Bank in Seoul on June 21, 2021.JUNG YEON-JE | AFP via Getty Images

SINGAPORE — Asia-Pacific markets traded mostly lower on Friday, following overnight losses on Wall Street, as investors assessed monetary policy decisions from two key central banks.

Japan’s Nikkei 225 fell 0.92% while the Topix index slid 0.7%. Chinese mainland shares also tumbled, with the Shanghai composite falling 0.59% while the Shenzhen component shed 1%.

In Hong Kong, the Hang Seng index slipped 0.79% while the tech-focused Hang Seng Tech Index dropped 2.14%.

Hong Kong-listed shares of Chinese tech companies sold off sharply: Alibaba shares fell 3.07%, JD was down 3.65%, Meituan declined 3.27%, search engine giant Baidu tumbled 1.01% and Tencent slipped 2.25%.

The United States on Thursday said it was imposing trade restrictions on more than 30 Chinese research institutes and entities over human rights violations and the alleged development of technologies, such as brain-control weapons, that undermine U.S. national security.

South Korea’s Kospi traded near flat, up just 0.06% after erasing earlier losses.

In Australia, shares bucked the downward trend with the benchmark ASX 200 gaining 0.68%.

Friday’s session follows overnight declines on Wall Street where weakness among large tech stocks dragged down major market averages.

Central banks in focus

Elsewhere, the Bank of England hiked interest rates on Thursday for the first time since the pandemic started. It raised its main interest rate from a historic low of 0.1% to 0.25% amid mounting inflation pressure.

The European Central Bank further cut its bond purchases overnight but vowed to continue its unprecedented monetary policy support for the euro zone economy into 2022. It left the benchmark refinancing rate unchanged at 0%, while the rate on its marginal lending facility remained at 0.25%.

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Decisions from Bank of England and European Central Bank followed after earlier in the week, the U.S. Federal Reserve said it will accelerate the reduction of its monthly bond purchases, after which, the central bank expects to start raising interest rates.

The Bank of Japan is due to announce its monetary policy decision today and analysts say they do not expect any substantive changes.

Weak inflation expectations is one of the likely reasons that the Bank of Japan will not follow in the same direction as the Fed on Friday, Joseph Capurso, head of international economics at the Commonwealth Bank of Australia, wrote in a Friday morning note.

“All the developed economies have faced supply bottlenecks for some products,” Capurso said.

“The sharp contrast between high US inflation and barely existent inflation in Japan suggests that supply bottlenecks are not dominating the overall inflation trend,” he said, adding, “Other factors such as a very strong demand impulse in the US compared to elsewhere, including Japan, is probably behind the US’s exceptional inflation impulse.”

TICKER COMPANY NAME PRICE CHANGE %CHANGE
.N225 Nikkei 225 Index *NIKKEI 28799.6 -266.72 -0.92
.HSI Hang Seng Index *HSI 23260.4 -215.1 -0.92
.AXJO S&P/ASX 200 *ASX 200 7332.3 36.6 0.5
.SSEC Shanghai *SHANGHAI 3641.77 -33.24 -0.9
.KS11 KOSPI Index *KOSPI 3004.01 -2.4 -0.08
.FTFCNBCA CNBC 100 ASIA IDX *CNBC 100 9864.76 -68.3 -0.69

Currencies and oil

In the currency market, the dollar index traded near flat at 96.028 against a basket of its peers.

The Japanese yen strengthened from above 114 to 113.65 against the greenback while the Australian dollar changed hands at $0.7173, down some 0.14%.

Oil prices fell on Friday during Asian trading hours. U.S. crude futures dipped 0.33% to $72.14 while global benchmark Brent fell 0.24% to $74.84.

Source : CNBC

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