Asian stocks ended mostly lower on Thursday, extending losses from the previous session, as investors fretted about mounting debt in the U.S. and awaited cues from Friday’s U.S. jobs report.
Chinese shares rose on late buying after a private survey showed services sector activity in the country expanded at a stronger pace in July compared to June.
The benchmark Shanghai Composite Index climbed 0.6 percent to 3,280.46 despite Morgan Stanley reducing its rating on Chinese stocks. Hong Kong’s Hang Seng Index ended 0.5 percent lower at 19,420.87.
Japanese shares tumbled and the 10-year Japanese government yield hit its highest level in over nine years, as strong private sector payrolls data released overnight spurred fresh concerns about the outlook for U.S. interest rates.
The Nikkei 225 Index slumped 1.7 percent to 32,159.28, while the broader Topix Index settled 1.5 percent lower at 2,268.35.
Heavyweight semiconductor stocks led loses, with Advantest, Tokyo Electron and Screen Holdings falling between 1.1 percent and 2.7 percent. Marine transportation firm Kawasaki Kisen jumped 4 percent on share buyback news.
Seoul stocks declined amid selling by foreign and institutional investors. The Kospi Average dropped 0.4 percent to 2,605.39.
Australian markets fell after a slew of data showed activity in the country’s services sector contracted in July, retail sales volumes recorded a third consecutive quarterly fall in the second quarter and the trade surplus remained steady in June.
The benchmark S&P ASX 200 Index ended down 0.6 percent at 7,311.70, while the broader All Ordinaries Index closed 0.6 percent lower at 7,522.30. While tech stocks followed their U.S. peers lower, miners fell on concerns about the health of China’s property sector.
Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index slipped 0.2 percent to close at 11,936.62.
U.S. stocks and bonds suffered a wave of selling overnight after a surprise downgrade of the country’s debt rating by Fitch, citing fiscal deterioration and repeated debt ceiling standoffs.
Also, data showed U.S. private sector employment jumped by much more than expected in July, reviving Fed rate hike bets.
The tech-heavy Nasdaq Composite plunged 2.2 percent, while the Dow lost 1 percent and the S&P 500 gave up 1.4 percent.
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