Asian Shares Stumble Even As U.S. Market Rallies
Asian shares slipped in cautious trading Wednesday, Oct. 6, 2021, shrugging off a rally on Wall Street led by technology companies and banks that erased most of the losses from the previous day’s sell-off, Yuri Kageyama reported for the Associated Press (AP).
Photo Insert: The Korea Exchange
Japan’s benchmark Nikkei 225 sank 1% in morning trading to 27,544.06, after opening higher. South Korea’s Kospi dipped 1.0% to 2,932.15. Australia’s S&P/ASX 200 shed 0.5% to 7,209.40. Hong Kong’s Hang Seng fell nearly 0.9% to 23,899.34.
Trading was closed in Shanghai for the Chinese national holidays. Worries remain in Asia about ongoing coronavirus infections, although hopes are growing that economic activity will return closer to normal later this year, bouncing back from the deep downturn in 2020.
On Wall Street, the S&P 500 rose 1.1% to 4,345.72. The Dow Jones Industrial Average added 0.9% to 34,314.67, and the Nasdaq gained 1.3% to 14,433.83. Small-company stocks also notched gains.
The Russell 2000 index picked up 0.5% to 2,228.36. The gains marked a reversal in the market’s overall trajectory in recent weeks. The S&P 500 fell 4.8% in September, its first monthly drop since January.
After steadily losing ground since it set an all-time high Sept. 2, the index slipped Tuesday below its 100-day moving average of 4,354. That sends a signal to traders that the index has reached “a good level of support for stocks to trade higher,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
“On the risks front, China credit problems and contagion risks have certainly not abated with developer concerns still surfacing. As such, caution has not been thrown to the winds,” said Tan Boon Heng of the Asia & Oceania Treasury Department at Mizuho Bank in Singapore.
Troubled real estate developer China Evergrande Group’s risk of defaulting on its more than $300 billion in debt has alarmed investors already worried over the slowdown in China’s growth.