A currency trader looks at a monitor near a screen displaying the Korea Composite Stock Price Index (KOSPI) (left) and the exchange rate between the U.S. dollar and the Korean won in the foreign exchange dealing room at the KEB Hana Bank headquarters in Seoul, South Korea. , Tuesday, September 26, 2023. Asian stocks were mostly lower on Tuesday, September 26, on concerns about a possible US government shutdown and a struggling Chinese economy. (AP Photo/Ahn Young-joon)
TOKYO (AP) — Asian stocks were mostly lower Tuesday on concerns about a possible U.S. government shutdown and China’s troubled economy.
Japan’s benchmark Nikkei 225 index fell 0.6% in morning trading to 32,469.85. Australia’s S&P/ASX 200 index fell 0.5% to 7,042.50. South Korea’s Kospi fell nearly 1.0% to 2,471.30. Hong Kong’s Hang Seng Index fell 0.9% to 17,578.90, and the Shanghai Composite Index fell 0.2% to 3,110.86.
Investors are keeping an eye on Chinese economic data to be released later this week.
Tina Teng, market analyst at CMC Markets Asia Pacific and Canada, said: “China’s real estate troubles are far from over as the notorious developer Evergrande defaulted on repaying 4 billion yuan of domestic debt and delayed restructuring meetings. No,” he said.
Wall Street has recouped some of its steep losses from last week. The S&P 500 rose 17.38 (0.4%) to 4,337.44, emerging from its worst week in six months. The Dow Jones Industrial Average rose $43.04, or 0.1%, to $34,006.88, and the Nasdaq Composite Index rose $59.51, or 0.5%, to $13,271.32.
The perception that the Federal Reserve is likely to keep interest rates high next year is fading. The Fed has been trying to ensure high inflation is brought back on target and said last week that its rate cuts in 2024 are likely to be lower than originally expected. Key interest rates are at their highest levels since 2001.
Bond market yields have risen to their highest level in more than a decade, as there is widespread belief that interest rates will remain high for a long time. As a result, investors are less willing to pay high prices for all types of investments, especially those that are considered the most expensive or that make owners wait longer for significant growth.
The yield on the 10-year U.S. Treasury rose to 4.53% from 4.44% as of late Friday, nearing its highest level since 2007. This level has significantly increased from about 3.50% in May and 0.50% about three years ago.
“Stocks are far better able to digest gradual increases in interest rates associated with growth than rapid increases due to other factors, such as inflation or Federal Reserve policy,” Goldman Sachs strategists led by David Kostin wrote in a note. ” he said.
The rise in yields is at the top of a long line of concerns weighing on Wall Street. Not only have oil prices increased by $20 per barrel since June, but economies around the world have become unstable. Resuming U.S. student loan repayments could also weaken the U.S. economy’s biggest strength: household spending.
In the short term, the US government could be shut down again amid further political confrontations on Capitol Hill. But Chris Larkin, managing director of trading and investments at Morgan Stanley’s E-Trade, said Wall Street has weathered past shutdowns and that “history shows that past shutdowns have not had a significant impact on the market.” “It shows.”
On Wall Street, Amazon rose 1.7%, making it the most powerful single force pushing up the S&P 500. The company announced an investment of up to $4 billion in Anthropic to acquire a minority stake in the artificial intelligence startup. The company is the latest Big Tech company to pour money into AI in the race to profit from the opportunities presented by the latest generation of technology.
Shares of media and entertainment companies were mixed on Sunday after unionized screenwriters reached a tentative agreement to end a historic strike. There is no contract yet for the impressive actor.
Netflix rose 1.3%, while Walt Disney fell 0.3%. Warner Bros. Discovery fell 4%, the day’s biggest decliner among the S&P 500.
Shares of travel-related companies also fell on Wall Street, weighed down by concerns about rising fuel costs. Southwest Airlines fell 2% and Norwegian Cruise Line fell 3.1%.
In energy trading, benchmark U.S. crude oil fell 7 cents to $89.61 a barrel. Brent crude, the international standard crude, fell 14 cents to $93.15 per barrel. On Wall Street, Exxon Mobil rose 1.1% and ConocoPhillips rose 1.6%. Oil prices have soared since early summer.
In currency trading, the dollar rose from 148.84 yen to 148.93 yen. The euro fell to $1.0586 from $1.0594.
AP Business Writer Stan Cho in New York contributed to this report.
Yuri Kageyama, Associated Press
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