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Home / Business / Asian markets fall behind bleak US GDP data

Asian markets fall behind bleak US GDP data



Asian stocks plunged on Friday as reports showed that US workers’ layoffs are continuing at high levels as the US economy contracted at an annual rate of nearly 33% in the spring, the worst quarter on record.

Profit reports, an assessment of how well businesses are managing results from the coronavirus pandemic, added to the gloom. Some tech companies have stepped up their trend and are showing positive results. But many companies are hurting.

Nikkei 225 NIK of Japan,
-2.34%
fell 2.3% while the Hong Kong HSI Hang Seng index,
+ 0.07%
increased 0.2%. Shanghai Composite SHCOMP,
+ 0.14%
was ready for flat while the smaller Shenzhen Composite Chapel 399106,
+ 0.63%
won 0.3%. South Korean Kospi 180721,
-0.22%
fell 0.2%, Taiwan’s Taiex Y9999,
-0.05%
fell 0.3%, and Australia’s S&P / ASX 200 XJO,
-1.76%
ra 1.6%. Markets in Singapore, Malaysia and Indonesia closed for the holidays.

August tends to be a hateful month for stocks, noted AxiTrader Corp. Stephen Innes.

“Stock markets are looking extremely corrective to the extent that we can enter an attractive phase as we launch in August, most commonly referred to as a summer vacation,” Innes said in a comment.

In a positive signal, China reported its refined manufacturing activity in July and export orders strengthened despite weak US and European demand. The monthly survey released Friday was another sign that the world’s second-largest economy is gradually recovering from the coronavirus pandemic.

Central bank meetings for various countries are on the agenda for next week.

“Second-quarter GDP for Indonesia and the Philippines will also be examined, highlighting the impact of the pandemic,” said Bernard Aw, chief economist for IHS Markit in Singapore.

The Japanese government said late Thursday that the country’s economy is likely to sink 4.5% for the fiscal year ending in March 2021. It predicts a return to growth in the next fiscal year.

Among the Japanese companies reporting profits next week are Sony Corp. 6758,
-0.99%
, Motor Honda Motor 7267,
-4.55%
, Corp Toyota Motor 7203,
-2.58%
and Nintendo Co. 7203,
-2.58%.

Some companies are holding up better than others.

Japanese media reports said Toyota was on track to become the No. 1 vehicle in the world, surpassing Volkswagen, now the top manufacturer in global vehicle sales. Toyota sales were already recovering in markets like China, which is recovering from early COVID-19 explosions, according to the company.

Overnight, the U.S. reported that the economy was contracting at an annual rate of 32.9% breaking the April-June rate as pandemic closures widened.

News of the deep, steep decline came as the resurgence of explosions has pushed businesses in many areas to close for the second time. The government’s estimate of the second-quarter decline in gross domestic product has made no comparison since census began in 1947. The previous quarterly contraction was worse – by 10%, less than a third of what was reported Thursday. – occurred in 1958 during the administration of Einsenhower.

The bad news was no big surprise, and on Wall Street, the S&P 500 SPX,
-0.37%
fell 0.4% to 3,246.22. Almost three of the four stocks in the index fell. Among the hardest hit were oil producers, banks and other companies most in need of the economy to escape the recession.

Dow Jones industrial average DJIA,
-0.85%
lost 0.9% to 26,313.65.

The shares seemed set for a much faster decline of the day, but stronger gains than expected from UPS and other companies helped the market cut its losses. So did the stable prices for Amazon and other large technology-oriented stocks, which reported their results after the end of the day trading.

Predicting their reports, which proved to be even better than expected from Wall Street, helped the Nasdaq composer,
+ 0.42%
completely erase its early loss and climb 0.4% to 10,587.81.

But overall, earnings ratios were well below the level of a year ago, before the pandemic hit. The big companies in the S&P 500 are on track to report a nearly 38% drop for the second quarter from a year ago, according to FactSet.

Shortly after trading for the day ended, Amazon AMZN,
+ 0.60%
, Apple AAPL,
+ 1.21%
, Facebook FB,
+ 0.51%
and Google Alphabet parent company GOOGL,
+ 0.97%
GOOG,
+ 0.62%
all reported higher gains for the last quarter than Wall Street predicted. Investors have continued to flock to them expecting them to thrive as the pandemic accelerates a shift towards online commerce.

American crude standard CLU20,
+ 0.45%
earned 14 cents to $ 40.06 a barrel in electronic trading on the New York Merchantile Exchange. Brunette oil BRNU20,
+ 0.46%
, the international standard, rose 37 cents to $ 43.31 a barrel.

USDJPY Dollars,
-0.44%
fell to 104.22 Japanese yen from 104.73 yen.


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