Global Markets:
- Asian Stock Markets : Nikkei down 1.68%, Shanghai Composite up 0.58%, Hang Seng down 0.67%, ASX down 0.58%
- Commodities : Gold at $1972.52 (-0.17%), Silver at $23.70 (-0.74%), Brent Oil at $82.50 (-0.84%), WTI Oil at $78.78 (-0.78%)
- Rates : US 10-year yield at 4.152, UK 10-year yield at 4.4845, Germany 10-year yield at 2.5405
News & Data:
- (USD) ADP Non-Farm Employment Change 324K vs 191K expected
- (USD) Crude Oil Inventories -17.0M vs -0.9M expected
Markets Update:
Asia-Pacific markets displayed a mixed performance on Thursday, reacting to Wall Street’s sell-off triggered by the downgrade of the United States’ long-term credit rating from AAA to AA+ by ratings agency Fitch. In Hong Kong, the Hang Seng index experienced a decline of 0.67% during its final hour of trading. However, mainland Chinese markets managed to reverse their earlier losses. The Shanghai Composite closed on a positive note, rising by 0.58% to reach 3,280.46, and the Shenzhen Component rebounded by 0.53%, closing at 11,163.42. Adding to the positive sentiment, China’s Caixin survey for the services sector revealed a stronger expansion in July compared to June.
In contrast, Japan’s markets took a substantial hit, with the Nikkei 225 falling by 1.68%, marking the steepest decline in the region and concluding at 32,159.28. The Topix also suffered losses, ending 1.45% lower at 2,268.35. Investor sentiment was adversely affected by the downgrade of the US credit rating and the sell-off in Wall Street, leading to risk aversion in the Japanese markets.
South Korea’s markets showed mixed results, with the Kospi falling 0.42% to finish the day at 2,605.39, while the Kosdaq rose 1.16% and closed at 920.32. Notably, South Korean internet giant Kakao faced a setback as its second-quarter net profit plummeted by 44%, leading to an initial slide in its shares, although they managed to recover some ground later in the day. This volatility in the South Korean markets reflected investors’ uncertainty and cautiousness amid the global economic developments.
In Australia, the S&P/ASX 200 slid 0.58%, closing at 7,311.8. The country’s June trade balance exceeded expectations, contributing to the market’s performance. Despite this positive economic indicator, the overall sentiment in the Asia-Pacific region was impacted by the negative cues from the US markets. Overnight in the US, all three major indexes lost ground, with the Nasdaq Composite witnessing a significant tumble of 2.17%, marking its worst day since February. The S&P 500 pulled back by 1.38%, and the Dow Jones Industrial Average slid 0.98%. These events set the tone for the day in the Asia-Pacific markets and underscored the interconnectedness of global financial markets in today’s interconnected world.
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