Asian shares down on caution after modest US gains

TOKYO (AP) – Asian shares fell yesterday as caution set in over company earnings reports, recent choppy trading in technology stocks and prospects for more economic stimulus for a world battling a pandemic.

Japan’s Nikkei 225 slipped 1.0 per cent to 28,360.42, while South Korea’s Kospi dropped 1.4 per cent to 3,086.72. Australia’s S&P/ASX 200 slipped 0.9 per cent to 6,765.50. Hong Kong’s Hang Seng lost 0.9 per cent to 29,048.31, while the Shanghai Composite was down 0.3 per cent to 3,506.75.

Also on market players’ minds is the global vaccine rollout, which is becoming more organized in the United States (US), but has yet to play out in much of Asia, except for China, where the pandemic started.

“As the rally waned for the US market, Asia markets can be seen left to their own devices into the Thursday session, and it appears that investors may be locking in some of the recent gains,” said Jingyi Pan, a senior market strategist for IG in Singapore.

Wall Street ended with modest gains, with the S&P 500 inched up 3.86 points, or 0.1 per cent, to 3,830.17, after swinging between a gain of 0.6 per cent and a loss of 0.3 per cent. The tiny gain extended the benchmark index’s winning streak to a third day.

A specialist works at the New York Stock Exchange. PHOTO: AP

The Dow Jones Industrial Average gained 36.12 points, or 0.1 per cent, to 30,723.60. The tech-heavy Nasdaq slipped 2.23 points, or less than 0.1 per cent, to 13,610.54. The index had briefly been above its all-time high set last week.

Smaller companies fared better than the broader market. The Russell 2000 small-caps index rose 8.26 points, or 0.4 per cent, to 2,159.70.

The index is up 9.4 per cent this year, while the S&P 500 is up about 2 per cent and the Nasdaq is up 5.6 per cent.

Energy, communications and financial stocks helped lift the market. Those gains were primarily kept in check by declines in companies that rely on consumer spending and technology stocks.

Investors continued to watch shares of companies such as GameStop and AMC Entertainment, which notched modest gains Wednesday. GameStop rose 2.7 per cent and AMC climbed 14.7 per cent. The stocks have been caught up in a speculative frenzy by traders in online forums who seek to inflict damage on Wall Street hedge funds that have bet the stocks would fall. GameStop plunged 60 per cent on Tuesday, and AMC Entertainment lost 41.2 per cent.

“There’s a tug of war that’s been brewing for a week or so now, that markets are ripe for a correction and whether the events of last week are a precipitating event,” said Jamie Cox, managing partner at Harris Financial Group.