Asian stocks fell on Thursday as caution settled in among investors after banks and industrial companies helped push stocks up primarily on Wall Street.
Japan’s Nikkei 225 benchmark edged down 0.2% in afternoon trading to 28,024.44. South Korea’s Kospi slipped 0.5% to 3,205.83 after a puzzle earlier in the day. The Australian S & P / ASX 200 lost its earlier gains and was little changed, falling less than 0.1% to 7,580.40. The Hong Kong Hang Seng lost 0.5% to 26,531.74, while the Shanghai Composite lost 0.3% to 3,523.91.
Concerns in the region remained over the recent regulatory crackdown in China. Analysts said the next target seemed to be the online insurance industry.
“This comes against a backdrop of increasing risks from COVID-19, with further tightening of restrictions in several cities that may impact the service sector in the short term,” said Yeap Jun Rong, market strategist at IG in Singapore.
Cases of COVID-19 infection are also on the rise in Japan, where a state of emergency is in place, even as the country has hosted the Tokyo Olympics and plans to do the same for the Paralympic Games, which s ‘will open later this month. Cases are reaching record levels in Tokyo, as well as in several other regions. Medical authorities say hospitals are increasingly restricted.
“On the COVID-19 front, concerns about increasing restrictions are becoming a source of concern. Growth expectations in the region are likely to suffer in the coming weeks. The recent resurgence of the virus will likely slow the economic recovery, ”said Anderson Alves, trader at ActivTrades.
On Wednesday on Wall Street, the S&P 500 and the Dow Jones Industrial Average broke the records they set the day before. Almost three-quarters of the companies in the benchmark posted gains, including energy stocks, which rose with the price of crude oil. Health care was the only sector to decline.
After a tough start to the week, stocks advanced on strong earnings and better-than-expected economic data.
Traders received a healthy dose of economic news on Wednesday when the Labor Department said consumer prices rose 0.5% from June to July., down from the previous monthly increase of 0.9%. Year over year, consumer prices increased 5.4%.
Investor relief that June data did not show a larger rise in inflation may have kept stock prices on the rise, said Sam Stovall, chief investment strategist at CFRA.
“Our guess was that June was going to be the peak inflation month, and it looks like it is,” Stovall said.
The S&P 500 Index gained 10.95 points to 4,447.70. The Dow Jones gained 220.30 points, or 0.6%, to 35,484.97. Both indices also hit all-time highs on Friday and Tuesday.
Weakness in some tech stocks helped pull the Nasdaq composite down slightly. It fell 22.95 points, or 0.2%, to 14,765.14.
Small business shares rose. The Russell 2000 Index gained 10.98 points, or 0.5%, to 2,250.34.
Bond yields for the most part fell slightly. After hitting 1.36% at the start, the 10-year Treasury yield slipped to 1.33% from 1.34% on Tuesday night.
Investor worries about inflation and uncertainty about the Federal Reserve’s future plans to ease support for low interest rates weigh on the market.
While the big numbers might sound bad, most of the consumer price hike has to do with very specific goods that are unlikely to impact the long-term health of the economy, such as passenger cars. used, building materials and hotel rooms. These items became scarce during the pandemic, and increased economic activity caused the prices of these items to rise faster than usual.
The Federal Reserve has repeatedly stated that it believes any increase in inflation will be temporary and will be largely the result of supply disruptions due to the pandemic. Investors will have another snapshot of inflation on Thursday, when the Labor Department releases its July wholesale price data.
Banks made some of the biggest gains on Wednesday after bond yields initially rose, which benefits lenders as it allows them to charge higher interest on loans. Bank of America rose 1.3%.
Industrials also helped lift the market. United Rentals climbed 5% for one of the biggest gains in the S&P 500.
Traders had a mix of earnings and company news to look at. Coinbase, a platform where traders can buy and sell digital currencies like bitcoin, rose 3.2% after seeing strong growth in the last quarter.
Weight loss operator WW International plunged 24.6% after posting disappointing second quarter financial results, while burger chain Wendy’s rose 3.7% after raising its profit forecast for the year and increased its dividend.
Meanwhile, the New York Stock Exchange will begin requiring on September 13 that anyone entering their trading floor show proof that they have been vaccinated against COVID-19, according to an email obtained by the Associated Press.
People with an exception to the rule because they cannot get the vaccine for eligible medical or religious reasons will need to prove that they have tested negative for the virus three times a week. The policy change, which applies to anyone with access to the NYSE or the American Options Trading Floors, comes as alarm grows about the rapidly spreading delta variant.
In energy trading, benchmark US crude fell 3 cents to $ 69.22 a barrel. Brent crude, the international standard, slipped 2 cents to $ 71.42 a barrel.
In currency trading, the US dollar edged down to 110.39 Japanese yen from 110.41 yen. The euro cost $ 1.1745, compared to $ 1.1738.
AP Business Writers Damian J. Troise and Alex Veiga, AP Economics Writer Christopher Rugaber contributed.