Asian stocks opened mostly lower Wednesday, pausing after several consecutive sessions of gains, amid disappointing results from technology and industrial heavyweights in the US.
Japan’s Nikkei Stock Average was off 1% at 20627.3, while Australia’s S&P ASX 200 declined 0.9% to 5657.4, both indexes sliding after a six-day winning streak.
Tsuyoshi Nomaguchi, a senior strategist at Daiwa Securities, said International Business Machine Corp.’s earnings miss and Apple Inc.’s weak iPhone revenue outlook will weigh on Japan’s technology shares, while the market as a whole is in line for a routine round of profit-taking, MarketWatch reported.
“The sensitivity to earnings will only grow after the Bank of Japan lowered its GDP forecast, meaning business results are going to have to really impress in order to maintain investor interest,” he said.
In China, the Shanghai Composite Index lost 0.5% to 3996.43, breaking four consecutive sessions of gains. Tuesday’s rally had pushed the smaller Shenzhen Composite back into a bull market, defined as a rise of more than 20% from a recent low.
The Shenzhen market was last flat at 2266.61. The Hang Seng Index was down 0.5% at 25401.79.
The government has continued on its path of monetary easing to support the economy and investors expect that to buoy the market, although its rebound from a heavy selloff the past month has been uneven. The Shanghai Composite remains off 23% from its seven-plus-year high on June 12, and authorities are expected to continue their tightening efforts on margin trading, which could push down the market.
China’s central bank has injected additional capital into two of the nation’s policy banks to help them better support a weakening economy, according to a Tuesday report by Caixin, a local business magazine.
The People’s Bank of China has injected $48 billion into China Development Bank and $45 billion into the Export-Import Bank of China, according to the report. China’s Ministry of Finance has injected 100 billion yuan ($16 billion) into the Agricultural Development Bank of China, another government-run policy bank, the report said.
Meanwhile, overnight, all three Wall Street indexes decreased and the US dollar also declined against its peers as investors cashed out after a period of sharp gains in the currency. The dollar was recently down 0.1% against the yen at ¥123.776.
