Tokyo, Sep 24 (AP) Asian shares were trading mixed in Thursday trading, as investors tried to digest the recent swings in oil prices and the US bond market.
Japan’s benchmark Nikkei 225 gained 0.8 per cent to 65,513.99, as some chipmakers got a boost from the recent interest in artificial intelligence. Australia’s S&P/ASX 200 fell 0.7 per cent to 8,702.00.
Hong Kong’s Hang Seng lost 0.4 per cent to 24,730.44, while the Shanghai Composite dipped 1.2 per cent to 3,889.47. Trading was closed in South Korea for the Chuseok autumn harvest holiday.
In energy trading, benchmark US crude rose 0.67 per cent to USD 92.78 a barrel. Brent crude, the international standard, gained 0.57 per cent to USD 103.67 a barrel.
The price for a barrel of Brent remains much higher than the roughly USD 72 it cost before the war with Iran began, and worries are running high that the war with Iran will keep oil bottled up in the Middle East for a long time. Talks are continuing with mediators between US and Iranian officials, but nothing concrete has come from it yet.
Investors are also closely watching for what might come of the talks between Presidents Donald Trump and Xi Jinping later in the day at the White House. A lot is likely to be discussed, including trade, the war in Iran and AI. Some analysts are not too optimistic about seeing major agreements.
Overnight, Wall Street got hit by pressure from the US bond market after a surprisingly strong report on the economy raised worries about inflation.
The S&P 500 fell 0.8 per cent after finishing the prior day just 0.4 per cent below its record set last month. The Dow Jones Industrial Average dropped 352 points, or 0.7 per cent, while the Nasdaq composite sank 1.1 per cent from its own all-time high.
The yield on the 10-year Treasury jumped to 5.10 per cent from 4.96 per cent, a considerable move for the bond market. High yields undercut prices for stocks and other investments, while also slowing the economy by making it more expensive for everyone to borrow money.
Wednesday’s jump briefly sent the 10-year yield near 5.14 per cent, back to where it was in 2007 before the global financial crisis caused yields to crater. Yields have accelerated recently because of worries about high inflation, the US government’s heavy debt and other concerns.
Worries about inflation got a jolt after a preliminary report suggested growth in US business activity surged to its strongest level in more than five years.
US inflation has remained so stubbornly high that the Federal Reserve raised its short-term interest rate last week for the first time in three years. Fed Gov. Michael Barr said in a speech this week that further hikes “are likely to be needed” to get inflation to the Fed’s 2 per cent target.
Although the Bank of Japan recently raised its benchmark interest rate to stem the slide in the Japanese yen, the move was largely figured in for weeks. And so the yen hasn’t really bounced back. A weak yen works as a negative for oil-importing Japan when oil prices are soaring.
In currency trading, the US dollar edged up to 158.45 Japanese yen from 158.30 yen. The euro cost USD 1.1385, little changed from USD 1.1388.
All told, the S&P 500 fell 58.61 points to 7,706.03. The Dow dropped 352.10 to 51,511.59, and the Nasdaq composite sank 308.24 to 26,936.04.
(PTI News)
