Asian stocks performance revealed a mood of uncertainty among investors. While positive news emanated from the U.S., it was not enough to boost markets throughout the region. Although gains were seen in Japan and Australia, they were accompanied by losses in China, India, and South Korea.
The MSCI Asia Pacific Index fell 0.9% to close at 121 while the MSCI Asia Apex 50 closed at 767, down 0.05% for the day.
The Japanese NIKKEI 225 surged 1.7% to close at 9,654. Japanese stocks rose on U.S. economic data that exceeded analysts’ expectations. The ISM non-manufacturing index (NMI)—which covers almost 90% of the economy—signaled expansion for the seventh consecutive month in July, rising to 54.3 from 53.8 in June (readings above 50 signal expansion). The increase in the index indicates that July’s growth pace was faster than June’s. (See RGE Critical Issue: U.S. Service Sector: Will Services Pick Up As Manufacturing Levels Off?) Also an ADP report showed that firms added 42,000 private jobs in July. While this was the sixth consecutive month of increase, the gains are disappointing in that they show no evidence of any acceleration. (See RGE Critical Issue: U.S. Labor Market: Slow Improvement in Private Payrolls)
In Hong Kong the Hang Seng Index showed slight gains on the day rising 0.01% to 21552. A majority of the sectors experienced losses on the day with only consumer services, telecommunications, and industrials posting gains.
China’s Shanghai Composite Index lost 0.7% to finish at 2,621. Chinese stocks fell as the state of the country’s real estate market has dampened investor confidence. Government stress tests point to risks associated with bank exposure to a potential property bubble.
India’s BSE SENSEX 30 closed at 18,173 after falling 0.2% for the day.
The Korean KRX 100 slid 0.4% to 3,754.
In Australia the S&P/ASX 200 jumped 0.5% to 4,567.
On currencies the yen, Aussie dollar and kiwi strengthened against the dollar while the rupee was down 4 basis points against the dollar.
The yields for 10-year sovereign bonds decreased in China, New Zealand and Indonesia. Meanwhile yields increased for Japan, Australia, Hong Kong and India.
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