Shares in Asia were lower on Friday as fears of a US recession gathered pace, with Hong Kong the hardest hit, dragged down by tech shares falling to record their biggest monthly drop in a year.
But some traders see the slowdown in the US economy as lengthening the odds of more severe central bank tightening and there was some bargain buying, particularly in some of the region’s emerging markets.
Japan’s Nikkei reversed course to close slightly lower as concerns about corporate earnings grew after Toyota supplier Denso cut its outlook, while a firmer yen also weighed on exporters .
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Nikkei Stock Average settled 0.05% lower at 27,801.64, after rising 0.7% earlier in the session. The index was down 0.4% for the week. The broader Topix fell 0.44% to 1,940.31 and posted a weekly loss of 0.8%.
Hong Kong shares ended lower and ended with their biggest monthly drop since July 2021, weighed down by sharp losses in major technology companies, which reignited investor concerns about a crackdown on technology sector, while stocks in mainland China also fell.
At the close, China’s blue-chip CSI300 index fell 1.3 percent to 4,170.10 points, also shedding 7 percent to post its biggest monthly loss since March.
And after Beijing omitted any reference to its full-year GDP growth target following a high-level Communist Party meeting, the Shanghai Composite closed down 0, 9%, to 3,253.24 points, losing 4.3% in July, with a two-month winning streak. streak.
China’s second-largest bourse’s Shenzhen Composite Index was down 1%, or 22.00 points, at 2,181.25.
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In Hong Kong, the benchmark Hang Seng index it fell 2.3% to 20,156.51 points, losing 7.8% during the month. Hong Kong-listed Chinese H shares fell 2.8% to 6,885.48.
Big losses in Hong Kong were led by major technology companies as investors worried about continued regulatory measures in the sector after a Wall Street Journal report said the Chinese billionaire Jack Ma planned to cede control of fintech giant Ant in an effort to sever ties with its parent company Alibaba.
Hong Kong shares of Alibaba Group fell 6.1% at the close and shares of China’s food ordering and delivery platform Meituan fell 6.2%.
The Hang Seng Technology Index, a gauge that tracks the performance of major technology companies listed on the financial hub, fell 4.9% at the close.
Australian shares posted their first monthly gain in four, with miners leading gains on Friday as signs of an economic slowdown and cooling inflation boosted hopes for less aggressive central bank monetary policy.
The S&P/ASX 200 ended up 0.8% at 6,945.20, its highest closing level since June 9. The benchmark gained 5.7% in July.
Elsewhere in the region, other markets posted gains with shares in Jakarta and Taipei. Indian shares also rose with Mumbai’s Nifty 50 index up 0.95%, or 160.65 points, at 17,090.25. Manila stocks, however, fell 1.3%.
Amazon and Apple earnings lift US stocks
Globally, stocks rose and were on course for their best month since late 2020 as traders bet that the weakening US economy could slow the pace of monetary tightening.
Futures markets are now predicting that US interest rates will peak in December this year compared to June 2023 in early July and the Federal Reserve will cut interest rates by nearly 50 bp l ‘next year to support the slowdown in growth.
The MSCI World index was last up 0.3%, on course for a monthly gain of close to 6%, the best since November 2020, boosted by strong gains in European markets, with the STOXX Europe 600 0.8% more.
US stocks look set to gain later in the session, with S&P 500 and Nasdaq futures up 0.7% and 1.4% respectively, boosted in part by strong gains by Amazon and Apple during the night
Despite the positive end to the month for stocks, Mark Haefele, chief investment officer at UBS Global Wealth Management, said investors should proceed with caution.
“In the near term, we believe the risk reward for broad equity indices will decline. Equities are pricing in a ‘soft landing’, but the risk of a deeper ‘fall’ in economic activity is elevated.”
In commodities, Brent crude futures and U.S. West Texas Intermediate crude futures were last up 1.3%-1.7% as concerns about supply shortages ahead of the next meeting of OPEC ministers offset doubts about the economic outlook.
Tokyo – Nikkei 225
Hong Kong – Hang Seng Index
New York – Dow > UP 1% to 32,529.63 (close)
Reuters with additional editing by Sean O’Meara
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Sean O’Meara is editor of Asia Financial. He has been a journalist for over 30 years, working on local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.