Asia report: Most markets finish lower after Wall Street sell-off

Most markets in Asia finished lower on Friday, as investors reacted to the largest one-day fall in stocks on Wall Street since March overnight.

In Japan, the Nikkei 225 was down 0.75% at 22,305.48, as the yen weakened 0.56% against the dollar to last trade at JPY 107.47.

Fashion firm Fast Retailing managed gains of 1.07%, while among the benchmark’s other major components, automation specialist Fanuc was down 1.49%, and technology conglomerate SoftBank Group slid 2.2%.

The broader Topix index slid 1.15% by the end of trading in Tokyo, to close at 1,570.68.

On the mainland, the Shanghai Composite slipped .04% to 2,919.74, and the smaller, technology-heavy Shenzhen Composite went against the regional trend, managing gains of 0.29% to 1,870.70.

South Korea’s Kospi dropped 2.04% to 2,132.30, while the Hang Seng Index in Hong Kong was off 0.73% at 24,301.38.

The blue-chip technology stocks were well into the red in Seoul, with Samsung Electronics down 3.68%, and chipmaker SK Hynix 3.73% weaker.

Carmaker Hyundai was also lower in Korea, plunging 4.61% by the close, while Hong Kong-listed shares in HSBC finished down 1.45%.

Investors in Asia spent the early parts of the day reacting to a substantial fall in equities stateside overnight, where the Dow Jones Industrial Average fell 6.9%.

It came after fresh data showed total Covid-19 infections in the United States had topped two million, with 18 states now seeing an increase in numbers.

The number of new cases globally also reached a new record level on Wednesday, at 135,000.

“US Treasury Secretary Mnuchin said the economy should remain open in case of a renewed surge in cases, but the absence of confinement measures could have more severe medium to long-term implications for the public health and the economy,” said Swissquote Bank senior analyst Ipek Ozkardeskaya.

“Therefore, it is not sure that such a decision would boost the market sentiment.

“Meanwhile, the weekly jobless claims in the US rose 1.5 million last week, reminding investors that the recovery we have seen in equity prices so far was meaningfully decoupled from the reality.”

Ozkardeskaya noted that Asian equities followed up on US losses, but added that the sell-off slowed in the afternoon session.

“The Nikkei was 0.8% down after recovering a 3% slump at the open amid the industrial production fall of 9.8% in April - more than analyst expectations.

“Hang Seng and Shanghai’s composite edged lower, as the Australian ASX 200 and the Korean Kospi were among the most severely [hit].”

Oil prices were higher as the region entered the weekend, with Brent crude last up 0.7% at $38.82 per barrel, and West Texas Intermediate ahead 0.66% at $36.58.

In Australia, the S&P/ASX 200 was off 1.89% at 5,847.80, as the hefty financials index dragged the wider benchmark lower.

Among the big four banks, Australia and New Zealand Banking Group was down 2.82%, Commonwealth Bank of Australia lost 1.64%, National Australia Bank was off 2.52%, and Westpac Banking Corporation slid 3.3%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 2.23% weaker at 10,905.94, led lower by subscription broadcaster Sky, which fell 11.1% after completing the retail portion of a NZD 157m fundraising.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.62% at AUD 1.4498, and the Kiwi advancing 0.49% to NZD 1.5474.