BANGKOK — Asian stock markets experienced declines on Thursday, following a trend of losses on Wall Street for three consecutive days as a prolonged record-setting rally appeared to lose momentum.
Oil prices saw an uptick, gaining nearly $1, while U.S. futures displayed mixed results.
In Japan, the Nikkei 225 index opened with some gains but ended up trading flat at 38,104.86, reacting to discouraging purchasing manager indexes that indicated a downturn in both the manufacturing and service sectors. The composite PMI from au Jibun Bank fell to its lowest point in two years, signaling that the private sector in Japan entered a contraction phase at the beginning of the fourth quarter.
“Confidence regarding growth in business activity over the next year has diminished in October to its lowest level since August 2020,” commented Usamah Bhatti, an economist at S&P Global Market Intelligence.
Chinese markets also faced setbacks, with Hong Kong’s Hang Seng index dropping 1% to close at 20,555.04, while the Shanghai Composite fell by 0.5% to 3,286.17.
In South Korea, the Kospi index decreased 0.2% to 2,593.57, while Australia’s S&P/ASX 200 saw a slight increase of 0.1%, reaching 8,225.90. Taiwan’s Taiex fell by 0.5%, and India’s Sensex also slipped 0.2%.
Market sentiment was heavily impacted by concerns regarding China’s economic landscape and the contentious U.S. presidential election, according to Stephen Innes from SPI Asset Management.
The S&P 500 index experienced a decline of 0.9% on Wednesday, settling at 5,797.42 after previously experiencing six weeks of consecutive gains, marking its longest winning streak of the year.
Stocks are under pressure from rising Treasury yields, which have made investors hesitant to purchase stocks at elevated prices, particularly as these prices have surged faster than corporate earnings.
The Dow Jones Industrial Average saw a decrease of 1% to 42,514.95, while the Nasdaq composite tumbled 1.6% to 18,276.65, with significant losses attributed to major technology stocks like Nvidia.
The yield on the 10-year Treasury bond climbed to 4.23%, up from 4.21% on Tuesday and from 4.08% recorded on Friday.
This increase in yields comes after a series of reports suggesting that the U.S. economy is performing better than anticipated, providing some reassurance to Wall Street that a severe recession might be avoided despite rising inflation concerns.
McDonald’s shares plummeted by 5.1% after federal health authorities linked its Quarter Pounder burgers to an E. coli outbreak that affected nearly 49 individuals across ten states. Investigators are working to identify the source of the contamination, prompting McDonald’s to discontinue the use of fresh slivered onions and quarter-pound beef patties in multiple states.
Despite reporting stronger-than-expected profits and revenue, Coca-Cola shares fell by 2.1%. Meanwhile, Boeing shares dropped 1.8% following a notably challenging day for the aerospace manufacturer, which reported a loss exceeding $6 billion for the past quarter. Additionally, Boeing factory workers voted 64% against the company’s latest contract proposal, opting to extend a six-week strike that has stalled production on their best-selling jets. Boeing’s stock has experienced a near 40% decline this year.
Heavyweights in the tech industry, who have benefited from the ongoing interest in artificial intelligence, faced pressure, with Nvidia plummeting 2.8% and Apple shedding 2.2%. Conversely, AT&T shares increased by 4.6% following stronger-than-expected quarterly profits, while Texas Instruments climbed 4% on reporting better-than-anticipated earnings and revenue.
In early Thursday dealings, U.S. benchmark crude oil rose by 91 cents to $71.68 per barrel on the New York Mercantile Exchange, while Brent crude, the global benchmark, climbed by 86 cents, reaching $75.82 per barrel.
The dollar decreased to 152.22 Japanese yen after peaking over 153 yen on Wednesday, while the euro strengthened to $1.0790 from $1.0783.