Fear of inflation dominated Wall Street stocks. The Dow Jones lost 0.86% , the S&P 500 yielded 0.75% and the Nasdaq dropped by 0.80%.ASIA
The Nikkei slipped by 1.25% after Covid-19 infections rose in Tokyo. The Kospi lost 1%, and the Hang Seng dropped by 1.84%.EUROPE
Stoxx 600 in Europe dropped to its lowest in almost two weeks.
High inflation dominates business results on Wall Street
This week’s high inflation levels overshadowed the good corporate results presented by some of the largest US banks on Wall Street. After a three-week streak of accumulated profits, Friday ended negatively on the New York Stock Market.
Wall Street started with an uplifted mood encouraged by the start of the new season of corporate results of the leading US banks that began on Tuesday.
Goldman Sachs and JP Morgan Chase presented solid figures that day, but the market was already worried about inflation. In June, the consumer price index, CPI, in the United States stood at 5.4 % year-on-year, the highest since 2008 and four-tenths more than in May.
As a result, on Tuesday, Wall Street was tinged red. Since Wednesday, the three main indicators on wall street changed from red to green frequently but without registering significant changes.
The Dow Jones lost 0.86% or 299.17 at 34,687.85. The S&P 500 yielded 0.75% or 32.87 at 4,327.16. Meanwhile, the Nasdaq dropped by 0.80%, or 115.90, to 14,427.24.
The Dow Jones accumulated a decrease of 0.52% in the last five sessions. The S&P 500 lost 0.97%, and the Nasdaq yielded 1.87%.
Despite the Fed’s Powell’s statements, stock markets did not show clear direction.
Annual results are still positive for the Wall Street
On Friday, the market revealed its fear of inflation. After publishing a survey that reflected that citizens expected a price increase of 4.8% on average this year, the highest since August 2008, wall street turned red. Andrew Hunter, an economist at Capital Economics, mentioned that the fear of inflation is now outweighing the positive trends.
Despite the rough week, the main Wall Street stocks still posted significant gains for the year. The Dow Jones advanced by 13.33%, the S&P 500 added 15.20%, and the Nasdaq hiked by 11.94%.
Nikkei slipped in the face of rising covid-19 cases
This Monday, the Nikkei fell by 1.25% this Monday due to fears about a slow economic recovery in the US and the rapid advance of covid-19 infections in Tokyo. The Nikkei lost 350.34 points to settle at 27,652.74.
The Topix, which includes the firms in the first section, those with the highest capitalization, lost 1.30% or 25.06 points, to stand at 1,907.13 units.
The Tokyo stock market closed lower for the fourth consecutive session, dragged down by the rapid advance of infections in Tokyo. Since January, with more than 1,000 daily cases, the Japanese capital suffers its biggest rebound and is in a state of emergency just a few days after the start of the Olympic Games. Moreover, the investors are worried about a slowdown in the economic recovery in the US and the local market.
All sectors posted losses, except pharmaceuticals. The air transport sector, iron and electronics sectors declined the most.
The pharmaceutical company Eisai recorded the second-highest volume of transactions and advanced by 1.21%.
Nintendo, video games developer and distributor, brought together the highest volume of daily operations and yielded 1.93%.
Communications giant Softbank slumped by 1.85%, while semiconductor maker Lasertec slipped by 2.16%. Fast Retailing, the parent of fashion chain Uniqlo, shed 1.10%.
Tech Sony lost 2.01%, while automaker Toyota dropped by 1.27%.
In the first section, 1,915 companies fell against 204 ones that advanced. Meanwhile, 69 shares closed unchanged. The trading volume amounted to 2.06 trillion yen.
Kospi drops 1% as Covid-19 and US data weigh
The Seoul Stock Exchange fell today. The Kospi lost 1% or 32.87 points to 3,244.04 due to the persistent advance of the delta variant of coronavirus in South Korea and Asia.
The Kosdaq technology index fell 2.15 points or 0.2%, to 1,049.83 units.
Foreign and institutional operators were once again net sellers on a day.
Countries that have controlled the pandemic well in Asia, such as Indonesia, Thailand or Vietnam, in South Korea, have experienced a rise in covid-19 cases. The number of new daily cases has been two weeks without going below 1,000.
The Kospi was also weighed today by the decline on Wall Street on Friday.
The technological Samsung Electronics slumped today by 1%. Meanwhile, SK Hynix, the second-largest global manufacturer of memory chips, lost 2.06%.
Naver, the main Internet search engine operator in South Korea, fell by 0.89%. Kakao, the owner of the largest South Korean messaging application, contracted by 0.91%.
In the biopharmaceutical sector, Samsung Biologics advanced by 1.89%. Its competitor Celltrion decreased by 2.23%.
Hyundai Motor, a South Korean carmaker, closed with a loss of 1.09%.
Regulatory restriction hits tech firms on Hang Seng
The Hang Seng dropped by 1.84% or 514.90 points to 27,489, weighed down by the falls of technology companies, lately subjected to greater regulatory scrutiny.
According to Louis Tse Ming-kwong, managing director of Wealthy Securities, since ANT Group’s IPO was pulled by Chinese regulators, the antitrust law has been applied to other tech stocks in China. The effects of the antitrust law have hit the sector.
The Hang Seng China Enterprises lost 1.91%.
Except for the Services sector, which advanced by 0.13%, all the sub-indices closed in negative. Commerce and Industry decreased by 2.15%, Real Estate lost 1.17%, and Finance shed 1.69%.
The worst performer of today’s session has been the digital company Meituan yielding 5.02%. It was followed by the processed food company WH Group losing 4.10% and the acoustic components company AAC Technologies with a decline of 3.47%.
Large digital companies suffered losses. Alibaba dropped by 3.25%, Tencent lost 2.57%, and Baidu slipped by 3.79%.
As for the few companies that advanced, the solar energy company Xinyi Solar posted a rise of 1.83%. The Alibaba health services subsidiary AliHealth added 1.31%, and the state telephone operator China Unicom enjoyed 1.21%.
The business volume of the session was 142,890 million Hong Kong dollars.
European stocks are losing steam again
European equities slumped on Monday. Investors are pressured by the risks of inflation and the spread of covid-19.
The Stoxx 600, the index that groups the 600 largest valued companies in the region, collapsed by 1.5%. This is the fourth consecutive fall after having reached historic highs last week.
The German DAX lost 1.1%, and France’s CAC 40 sank by 1.3%. UK’s FTSE 100 posted losses of 1.2%.
The energy sector was the biggest loser after the OPEC+ agreement to inject more oil into the market. The tourism sector is also at a loss after the UK tightened quarantine rules for visitors from France.
Peel Hunt analyst Ian Williams stated that the rise in the Delta variant is delaying loosening restrictions in many regions and affecting growth momentum.
Europe’s travel and leisure index sank by 2.9% to its lowest level since mid-February.
Investors are watching the new quarterly earnings season for signs of how companies continue to deal with covid-19.
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