A pedestrian passes by the Hong Kong Stock Exchange electronic screen in Hong Kong, Wednesday, June 21, 2023. Shares were mostly lower Wednesday in Asia after Wall Street benchmarks retreated following the S&P 500’s rise to its highest level since the spring of last year. (AP Photo/Louise Delmotte)
BANGKOK — Shares in Asia experienced a downturn after Wall Street benchmarks pulled back from the S&P 500’s recent surge to its highest level in over a year. However, U.S. futures remained relatively stable and oil prices saw an increase. The Nikkei 225 in Tokyo rose by 0.3 percent to 33,575.14, while the Hang Seng in Hong Kong had a 2 percent decline to 19,217.66. The Shanghai Composite index fell by 1.3 percent to 3,197.90, and the Kospi in Seoul slipped by 0.9 percent to 2,582.63. In Australia, the S&P/ASX 200 lost 0.6 percent, settling at 7,314.90. Bangkok’s SET experienced a decrease of 0.8 percent, whereas India’s Sensex rose by 0.3 percent.
This week lacks notable market-moving events. However, Federal Reserve Chair Jerome Powell is scheduled to testify before Congress on Wednesday and Thursday. In its most recent announcement, the Fed chose not to increase its benchmark lending rate, marking the first time in over a year. However, it did warn that it might raise rates twice more by the end of this year. Additionally, the Bank of England has a meeting on interest-rate policy scheduled for Thursday. The divergence among central banks worldwide as they tackle inflation while navigating a potentially pressured global economy is causing caution among investors. Stephen Innes of SPI Asset Management commented that “with central banks in the mood to dish out inflation pain these days, investors may need to see some positive inflation data convergence to narrow the wide disparity between the Federal Reserve and the market’s forward inflation expectations before breaking fresh higher ground on U.S. stocks.”
Upon reopening after the Juneteenth holiday, the U.S. stock market experienced a decline, with the S&P 500 dropping by 0.5 percent to 4,388.71. The Dow Jones Industrial Average fell by 0.7 percent to 34,053.87, and the Nasdaq composite experienced a 0.2 percent decrease, ending at 13,667.29. The stock market is taking a step back after several positive movements driven by hopes of avoiding a recession and easing inflation concerns. However, concerns about the Federal Reserve keeping interest rates high for an extended period, potentially negatively impacting the economy, are weighing on investor sentiment. It is anticipated that the economy and financial markets will face more challenging times as some of the temporary improvements in year-over-year inflation pass. Additionally, the Chinese economy, the world’s second-largest, is experiencing a stumble in its recovery from COVID-19 restrictions being lifted.
The majority of Wall Street suffered losses, with four out of five stocks in the S&P 500 experiencing declines. Concerns about the global economy resulted in lower prices for crude oil and energy stocks, which saw a 2.3 percent decrease, the largest loss among the S&P 500 sectors. Exxon Mobil and Chevron both fell by 2.3 percent. On a positive note, homebuilders saw gains after a report revealed that they had begun construction on more sites than expected the previous month. The number of building permits, an indicator of future activity, also exceeded expectations. PulteGroup rose by 1.9 percent, and D.R. Horton gained 1.6 percent.
Other trading activities on Wednesday include U.S. benchmark crude oil rising by 20 cents to $71.39 per barrel on the New York Mercantile Exchange. Brent crude, the international standard, increased by 16 cents to $76.06 per barrel. The dollar rose against the Japanese yen to 142.14 yen from 141.43 yen. The euro remained unchanged at $1.0922.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
