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Friday, June 21, 2024

Asian stocks pulled lower by profit warnings and signs the US economy is slowing

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Hong Kong, Nov 17 (AP) Asian stocks were mostly lower on Friday after Wall Street drifted to a mixed finish as momentum slowed following a strong rally in the first half of November.

US futures and oil prices edged higher.

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Hong Kong’s Hang Seng sank 2.1 per cent, to 17,450.44, dragged lower by a 9.8 per cent slump in shares of Chinese e-commerce giant Alibaba following its cancellation of a plan to spin off its cloud computing unit. The company cited uncertainties due to US chip restrictions. Alibaba shares dropped as much as 10 per cent in New York on Thursday.

The Shanghai Composite index edged 0.1% per cent higher to 3,054.37.

Tokyo’s Nikkei 225 index gained 0.5 per cent to 33,585.20 after Bank of Japan Gov. Kazuo Ueda indicated, in his annual report to the parliament, that the central bank has no immediate plans to change its ultra-lax monetary policy, which has kept the benchmark interest rate at minus 0.1 per cent for years.

The gap between Japan’s negative interest rate and the US benchmark rate of over 5.25 per cent has pushed the value of the US dollar much higher against the Japanese yen, complicating planning for corporations and raising costs for imports. But Ueda said the weak yen has both positives and negatives.

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Early Friday, the US dollar was trading at 150.51 Japanese yen, down from 150.73 yen. The euro edged up to USD 1.0854 from USD 1.0853.

In South Korea, the Kospi fell 0.7 per cent, to 2,469.85. Australia’s S&P/ASX 200 slipped 0.1 per cent to 7,049.40. Taiwan’s Taiex gained 0.2 per cent and the Sensex in Mumbai fell 0.1 per cent.

Wall Street’s stocks drifted to a mixed finish Thursday as market momentum slowed following the sizzling rally of the first half of November.

Several reports on Thursday indicated the US economy is slowing. Slightly more workers applied for unemployment benefits last week, and while the number is low relative to history, a softening in the job market could prevent strong raises in wages that the Fed fears could help keep inflation high.

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The S&P 500 edged up by 0.1 per cent to 4,508.24. It remains comfortably on track for a third straight winning week. The Dow Jones Industrial Average slipped 0.1 per cent to 34,945.47, and the Nasdaq composite gained 0.1 per cent to 14,113.67.

“If anything, data on Thursday further highlighted the economic risks as a trade-off to tight monetary policies,” Yeap Jun Rong of IG said in a market report.

Walmart weighed on the market with an 8.1 per cent drop after it warned that shoppers began pulling back on spending late last month. The nation’s largest retailer’s forecast for upcoming holiday profit was weaker than analysts had expected.

Macy’s jumped 5.7 per cent after delivering a surprising profit for the latest quarter. Sonos leaped 17.1 per cent on speculation that it may start selling headphones in the second half of its fiscal year, which could be a meaningful new business.

Cisco Systems tumbled 9.8 per cent even though it also reported stronger results for the latest quarter than analysts estimated. The company saw a slowdown of new product orders last quarter, and its forecasts for earnings were weaker than analysts expected.

Stocks in the oil-and-gas industry swooned after the price of crude tumbled sharply to its lowest level since July. Marathon Petroleum dropped 3.5 per cent, and Halliburton fell 3.3 per cent.

Early Friday, a barrel of benchmark U.S. crude for delivery in December was up 12 cents at USD 73.02. On Thursday, it tumbled USD 3.76 to settle at USD 72.90. Brent crude, the international standard, gained 7 cents to USD 77.49 per barrel.

November is on track to be the S&P 500’s best month in a year on rising hopes for a “Goldilocks” economy that’s just right for markets.

The yield on the 10-year Treasury fell to 4.44 per cent from 4.54 per cent late Wednesday. Just last month, it was above 5 per cent at its highest level since 2007 and raising worries on Wall Street as it undercut prices for stocks and other investments.(AP)

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