ASIA MARKETS: Asian Markets Pull Back After Weak Earnings In U.S.
Nikkei retreats from 20,000 mark, Kospi falls
Stock markets across Asia closed broadly lower on Friday, tracking overnight weakness in Europe and the U.S. amid disappointing earnings reports.
Japan was falling as stocks were hit by a 0.3% gain in the yen against the U.S. dollar, making the country's exports less competitive. The Nikkei Stock Average dropped 0.4%.
Among key Japanese export stocks, Toyota Motor (7203.TO) fell 1.2% and Honda Motor (HMC) lost 1.6%, while Sony (6758.TO) gave up 0.7%.
Elsewhere, Korea's Kospi ended 0.5% lower, while Australia's S&P/ASX 200 declined 0.7%. Hong Kong's Hang Seng Index ended up 0.1%. In China, the Shanghai Composite Index rose 0.7%, led by gains in insurance, aviation and automotive shares. Investors are watching whether the index holds above the key 3,000-point level.
"At the margins it's similar to what we saw in the U.S., there is a slightly risk-off feel to this market," said Chris Weston, chief market strategist at IG Markets in Australia.
Weston said sentiment was favoring less discretionary stocks in the market, although commodities in Australia continue to find some support. Among those, Rio Tinto (RIO) climbed 0.4% and BHP Billiton (BHP.AU) gained 0.6%, supported by a rise in copper prices.
Overnight, U.S. stock indexes pulled back slightly, with the Dow Jones Industrial Average ending down 0.1%, as individual stocks sold off following disappointing corporate earnings reports. Shares of department store leader Macy's (M) shed 17% after the firm reported a bigger-than-expected slide in first-quarter revenue.
Analysts, however, still see some potential for gains in Asia, which has seen India and South Korea log fresh record highs and Japan, Hong Kong, Indonesia and Taiwan post multiyear bests.
"We keep on making new records, and as long as we continue to have hot money I don't think it's going to be cut off any time soon," said Stuart Ive, private client manager at OM Financial in Wellington, New Zealand.
"We might have some corrections to the downside, but any pullbacks we've seen so far have been very, very shallow," Ive noted.
In the forex market, the New Zealand dollar was one of the biggest movers after the country's central bank surprised the markets by retaining a neutral bias, which pushed the currency down 1.5% against the U.S. dollar over the past day.
(END) Dow Jones Newswires
May 12, 2017 04:45 ET (08:45 GMT)