Asian shares follow Wall Street lower
A currency trader watches monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Oct. 19, 2023. (AP Photo/Ahn Young-joon)
BANGKOK — Shares tumbled in Asia on Thursday following a retreat on Wall Street after big U.S. companies delivered mixed profit reports and Treasury yields added pressure on stocks.
Worries about war in the Middle East also are dragging on markets.
Benchmarks in Hong Kong, Tokyo and Seoul fell about 2 percent.
Japan reported its exports swung into positive territory in September as vehicle shipments surged.
Exports rose 4.3 percent while imports sank 16.3 percent in September and the trade balance swung to a surplus of 62.4 trillion yen ($410 billion). Exports to the U.S. were up 13 percent while those to the rest of Asia declined 4.3 percent.
READ: Japan exports rise for the first time in three months
Imports fell as the price of oil moderated for a short time before surging once again with the start of fighting following the Oct. 7 surprise attack by the militant group Hamas on Israel.
Tokyo’s Nikkei 225 index lost 1.9 percent to 31,430.62. The Kospi in Seoul lost 1.9 percent to 2,415.80 as the Bank of Korea left its key interest rate unchanged.
Hong Kong’s Hang Seng index declined 2.2 percent to 17,349.79 and the Shanghai Composite index was down 1.6 percent, at 3,010.03. Australia’s S&P/ASX 200 sank 1.4 percent to 6,981.60.
India’s Sensex was 0.2 percent lower and Bangkok’s SET fell 0.9 percent.
“Another surge in Treasury yields, lingering geopolitical tensions in the Middle East and higher oil prices seem to dampen appetite in risk-taking for now,” Yeap Jun Rong of IG said in a report.
Rising oil prices
A big threat for the global economy is what oil prices will do to inflation. Crude prices jumped sharply on Wednesday following a deadly explosion at a hospital in the Gaza Strip, which sparked protests across the Middle East.
READ: Oil up about 2% on big US crude storage draw, Middle East tension
Early Thursday, U.S. benchmark crude oil was down 11 cents at $87.16 per barrel in electronic trading on the New York Mercantile Exchange. It had surged $1.83 on Wednesday to $87.27 per barrel.
Brent crude, the international pricing standard, fell 28 cents to $91.22 per barrel. It climbed $1.60 on Wednesday.
On Wednesday, the S&P 500 sank 1.3 percent and the Dow Jones Industrial Average lost 1 percent. The Nasdaq sank 1.6 percent.
Tesla’s share price fell 4.2 percent in afterhours trading after it reported its net income slumped in the third quarter, as price reductions helped drive strong sales growth but ate into the automaker’s profit margins.
Shares in Netflix jumped 12.8 percent in afterhours trading after it disclosed summertime subscriber gains that surpassed analysts’ projections, signaling the video streaming service’s password sharing crackdown is converting freeloaders into paying customers.
READ: Netflix raises prices and adds subscribers, despite strikes
United Airlines slumped 9.7 percent after it said surging fuel prices and the suspension of flights to Tel Aviv will take a toll on its business. Other airlines fell in concert, with American Airlines down 4.9 percent and Delta Air Lines down 4.4 percent.
Morgan Stanley tumbled 6.8 percent as investors focused on a weaker-than-expected showing by the company’s wealth management business, analysts said.
On the winning side was Procter & Gamble, the giant behind such brands as Charmin, Febreze and Oral-B. It rose 2.6 percent after reporting stronger profit than expected for the latest quarter as its revenue rose after it hiked prices.
S&P 500 firms’ earnings
The earnings reporting season for the summer is just starting and the broad expectation is for S&P 500 companies’ overall earnings per share to have climbed in the last quarter for the first time in a year.
The yield on the 10-year Treasury surged to 4.97 percent early Thursday after topping 4.9 percent Wednesday for the first time since 2007, just before the global financial crisis. It was at 4.84 percent late Tuesday and in the spring was at less than 3.5 percent.
The sharp jump in yields followed a report by the Treasury Department showing Chinese investors sold off the most U.S. bonds and stocks in four years in August.
Yields have climbed as the U.S. economy has remained remarkably resilient, even after the Federal Reserve raised its main interest rate to the highest level since 2001. High rates and yields hurt prices for stocks and other investments.
In other trading early Thursday, the dollar fell to 149.80 Japanese yen from 149.93 yen. The euro rose to $1.0539 from $1.0536.
Gold lost $10.30 to $1,958.00 per ounce early Thursday. It rose $32.60 to settle at $1,968.30 per ounce a day earlier as investors sought safer investments.
