Asian stocks decline following 2 days of US declines, forecast of lower corporate profits

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BEIJING, China – Asian stock markets fell Monday following two days of U.S. declines and forecasts of lower American corporate profits.

Oil rose above $104 per barrel amid renewed tensions between Ukraine and Russia.

China’s benchmark Shanghai Composite Index lost 0.4 per cent to 2,122.38 and the regional heavyweight, Tokyo’s Nikkei 225, shed 0.1 per cent to 13,944.43. Sydney’s S&P/ASX 200 dropped 0.9 per cent to 5,381.90.

The declines came after investors drove U.S. markets lower for a second day Friday due to anxiety that earnings growth was faltering.

Financial analysts expect earnings for companies in the Standard & Poor’s 500 to drop 1.6 per cent from a year earlier, according to FactSet, a financial data provider. That was a reversal from the start of the year, when they expected a jump of 4.3 per cent.

“We believe the selling is not finished,” said Bank of America Merrill Lynch in a report.

Hong Kong’s Hang Seng shed 0.1 per cent to 22,980.27 and Taiwan’s Taiex lost 0.5 per cent to 8,867.20.

Seoul’s Kospi was the only major market to gain, rising 0.1 per cent to 1,999.08. Singapore and Jakarta also rose.

In Japan, retailers are feeling the impact of a sales tax hike that took effect April 1. Department stores such as Takashimaya, Mitsukoshi and Sogo said sales plunged by 10 to 25 per cent in the first week of April.

“Consumption demand has fallen sharply since the new tax rate took effect,” said DBS Group in a report.

On Friday, the Nasdaq dropped 54.37 points, or 1.3 per cent, to 3,999.73. It was only the second time this year the index has closed below the 4,000 mark. February 3 was the last time it ended below that level.

The Dow Jones industrial average fell 143.47 points, or 0.9 per cent, to 16,026.75. The S&P 500 fell 17.39 points, or 1 per cent, to 1,815.69.

In energy markets, benchmark U.S. crude for May delivery was up 55 cents to $104.29 after Ukraine’s government announced Sunday it was sending in troops to try to quash a pro-Russian insurgency in eastern Ukraine despite warnings from the Kremlin. Markets have been rattled by concern Western sanctions against Moscow might disrupt Russian exports of oil and gas. The contract rose 34 cents Friday to close at $103.74.

In currency markets, the dollar fell to 101.54 yen from 101.63 yen late Friday. The euro was almost unchanged at $1.3852.

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