BANGKOK (AP) - Asian stock markets displayed mixed results in thin trading on Monday, following a slight retreat of U.S. stocks from their all-time highs. Oil prices experienced a decline, and U.S. futures dropped, while Chinese shares pulled back from early gains as a recent survey indicated a significant drop in export orders for manufacturers, reaching a five-month low.
The official manufacturing purchasing managers index (PMI) for China fell to 49.1 in January, decreasing from 50.1 in December, signaling a slip into contraction territory. According to Zichun Huang of Capital Economics, this slowdown may be temporary due to increased government spending. However, Huang emphasized that the disappointing PMI data highlights the challenges faced by policymakers in achieving a sustained recovery in growth.
In Hong Kong, the Hang Seng index rose by 0.9% to close at 20,249.64, while the Shanghai Composite index gained by 0.1%, reaching 3,256.91. Conversely, Tokyo's Nikkei 225 index saw a decline of 0.6% to 39,699.76, extending its losses after the Bank of Japan raised its benchmark interest rate to 0.25%, marking its highest level since 2008. In Bangkok, the Stock Exchange of Thailand (SET) fell by 0.2%. Many other Asian markets were closed due to the lunar new year holidays.
On the previous Friday, U.S. stocks saw a pullback from their record levels but still managed to close out a second consecutive winning week. The S&P 500 index decreased by 0.3%, ending at 6,101.24, while the Dow Jones Industrial Average also dipped 0.3% to 44,424.25. The Nasdaq composite index fell by 0.5%, closing at 19,954.30.
The trading environment was relatively quiet, supported by stability in the bond market, a significant factor influencing recent market movements. Concerns regarding inflation and the growing U.S. government debt led to increased Treasury yields, which negatively impacted stock prices. However, after a positive update on inflation last week, concerns eased, resulting in lower yields, which in turn helped lift stock prices.
A solid start to the earnings reporting season for major U.S. companies also contributed to supporting the stock market. Even with rising Treasury yields affecting stock valuations, companies are finding ways to generate larger profits. For instance, Texas Instruments fell by 7.5% despite exceeding analysts' expectations in terms of quarterly profit. Analysts focused on discouraging profit forecasts for the company's upcoming earnings, which affected stocks across the semiconductor sector.
Similarly, CSX saw a decline of 2.9%, despite delivering a quarterly profit that matched analysts' predictions. The railroad's revenue for the last quarter missed forecasts due to adverse effects from hurricanes. On the positive side, shares of Novo Nordisk enjoyed a notable increase of 8.5%, following the results of a clinical trial for a weight management treatment, hinting at potential future profits.
The yield on the 10-year Treasury eased to 4.61% from 4.65% late Thursday, with other yields also declining. This movement followed reports indicating that U.S. consumer sentiment was weaker than anticipated, with a decrease in January for the first time in six months. In a separate report, U.S. business activity also appeared to be weaker than expected. However, a preliminary report on sales of previously occupied homes indicated slightly better-than-expected results for the previous month, which followed what had been noted as the weakest year for such sales since 1995.
Despite the weak economic data, traders are not expecting the Federal Reserve to alter its main interest rate during its upcoming meeting. Analysts from the CME Group suggest that the central bank is highly likely to maintain its current rate. In early trading on Monday, U.S. benchmark crude oil prices dropped by 47 cents to $74.13 per barrel, while Brent crude, the international standard, also fell by 47 cents to $77.08.
