BANGKOK (AP) — Asian stocks experienced a downward trend on Thursday following mixed performances in U.S. stock indexes. This market movement came a day after robust economic reports stirred concerns that inflation and interest rates might persist at higher levels than anticipated. U.S. futures and oil prices also saw declines, while U.S. markets were closed on Thursday in observance of a National Day of Mourning for former President Jimmy Carter.
In Tokyo, shares fell significantly after Japan reported strong wage growth for November. This data could potentially influence the Bank of Japan to consider raising interest rates. The Nikkei 225 index decreased by 1.4% to close at 39,417.04, and the dollar weakened against the Japanese yen, trading at 157.78 yen, down from 158.36 late on Wednesday.
Chinese stocks presented a mixed picture, with Hong Kong's Hang Seng index edging up by 0.1% to 19,296.89, while the Shanghai Composite index slipped by 0.3% to 3,220.72. Meanwhile, in Australia, the S&P/ASX 200 index lost 0.4%, finishing at 8,312.20. South Korea's Kospi managed a slight increase of less than 0.1%, ending at 2,521.67 amid notable gains in the technology sector and automotive industry. However, Taiwan's Taiex fell by 1%, and India's Sensex was down by 0.3%. In Bangkok, the SET index dropped by 1.3%.
On Wednesday, Wall Street showed some steadiness with the S&P 500 rising 0.2% to 5,918.25, recovering from a 1.1% slump the day prior. The Dow Jones Industrial Average increased by 0.3% to 42,635.20, while the Nasdaq Composite saw a marginal decline of 0.1% to 19,478.88. However, the Russell 2000 index of smaller stocks fell by 0.5%. Significant losses were noted for Edison International, which tumbled 10.2% amid massive wildfires in the Los Angeles area, prompting the Southern California Edison utility to shut off power to nearly 120,000 customers across six counties due to safety concerns.
On a more positive note, eBay saw a remarkable gain of 9.9%, becoming the largest gainer in the S&P 500. This surge was attributed to a new collaboration with Meta Platforms, wherein select eBay listings will appear on Facebook Marketplace across the United States, Germany, and France.
The bond market, a focal point for Wall Street recently, fluctuated within a narrow range following comments from Fed Governor Christopher Waller, who reaffirmed expectations for the central bank to continue easing rates into 2025. Waller addressed speculation regarding the possibility of a halt in rate cuts after three reductions since September, indicating that potential tariff changes under President-elect Donald Trump would likely have a minimal impact on inflation.
Higher bond yields challenge stock performance by increasing borrowing costs for companies and households and drawing investors toward bonds instead of equities. As of late Tuesday, the yield on the two-year Treasury, closely aligned with Fed actions, decreased to 4.27% from 4.29%. The yield on the 10-year Treasury also eased to 4.67% from 4.69%, down from 3.65% observed in September.
The market initially calmed after Wednesday’s economic reports were less robust than those from Tuesday, fostering optimism for potential cuts to short-term interest rates, which could stimulate the economy and elevate investment prices. A report on Wednesday pointed to a slowdown in U.S. private sector hiring for December beyond economists' expectations, hinting at what Friday’s more detailed jobs report from the Labor Department may reveal. The objective is to strike a balance where the jobs report indicates enough strength to alleviate recession fears without suggesting that the Fed should refrain from rate cuts.
Additionally, another report indicated that fewer U.S. workers filed for unemployment benefits last week than anticipated, reinforcing the notion that the job market remains exceptionally strong. In a more specialized sector, Cal-Maine Foods saw a rise of 1% after the egg producer posted stronger-than-expected quarterly profits. CEO Sherman Miller attributed this growth to increased sales driven by consistent seasonal demand amid rising egg prices caused by a persistent bird flu outbreak.
