Asian shares slip, echoing Wall Street’s weak start to 2024

Shunichi Suzuki, Japanese finance minister, delivers speech during a ceremony marking the start of this year’s trading at the Tokyo Stock Exchange Thursday, Jan. 4, 2024, in Tokyo. Asian stocks plunged Thursday, echoing the pessimism on Wall Street as the Tokyo exchange marked the first day of trading for the year with a broad slide. (AP Photo/Eugene Hoshiko)

TOKYO  — Asian stocks slipped on Thursday, tracking a weak start to 2024 on Wall Street as Japan’s markets reopened.

The mood was somber in Tokyo as the market reopened from the New Year holidays with a moment of silence instead of a celebratory New Year’s ring of the bell after a major earthquake Monday left at least 77 people dead and dozens missing.

Dark-suited officials bowed their heads in a ceremony that usually features women clad in colorful kimonos. Japan’s benchmark Nikkei 225 fell 0.5 percent to 33,288.29.

Hong Kong’s Hang Seng shed 0.4 percent to 16,574.36 and the Shanghai Composite index sank 0.4 percent to 2,946.15.

Australia’s S&P/ASX 200 declined 0.4 percent to 7,494.10. South Korea’s Kospi declined 0.8 percent to 2,586.02. India’s Sensex, however, climbed 0.6 percent.

Stocks fell on Wall Street on Wednesday, as the slow start to the year there stretched into a second day.

READ: Wall St notches second lower finish as 2024 starts with profit-taking

The S&P 500 lost 0.8 percent to 4,704.81, though it remains within 2 percent of its record set exactly two years ago. The Dow Jones Industrial Average dropped 0.8%, from its own record to 37,430.19. The Nasdaq composite led the market lower with a drop of 1.2 percent, to 14,592.21.

Some of last year’s biggest winners again gave back some of their gains to weigh on the market. Tesla fell 4 percent after more than doubling last year, for example. It and the other six “Magnificent 7” Big Tech stocks responsible for the majority of Wall Street’s returns last year have regressed some following their tremendous runs.

A couple of reports released Wednesday morning indicated the overall economy may be slowing from its strong growth last summer, which the Federal Reserve hopes will keep a lid on inflation. The risk is it might slow too much.

One report showed U.S. employers were advertising nearly 8.8 million job openings at the end of November, down slightly from the month before and the lowest number since early 2021. The report also showed slightly fewer workers quit their jobs during November.

READ: US job openings fell slightly in November

The Fed is looking for exactly such a cooldown, which it hopes will limit upward pressure on inflation without a need for widespread layoffs.

“These data will be welcome news for policymakers,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

A second report from the Institute for Supply Management showed the U.S. manufacturing industry is improving by a touch more than economists expected, but it’s still contracting. Manufacturing has been one of the hardest-hit areas of the economy recently, while the job market and spending by U.S. households have remained resilient.

Treasury yields slumped immediately after the reports and then yo-yoed though the day. The yield on the 10-year Treasury eventually slipped to 3.91 percent from 3.94 percent late Tuesday. It’s been generally falling since topping 5 percent in October, when it was putting strong downward pressure on the stock market.

READ:  Wall St notches second lower finish as 2024 starts with profit-taking

Traders are largely betting the first cut to interest rates could happen in March, and they’re putting a high probability on the Fed cutting its main rate by least 1.5 percentage points during 2024, according to data from the CME Group. The federal funds rate is currently sitting within a range of 5.25 percent to 5.5 percent.

Even if the Federal Reserve pulls off a perfect landing to shimmy away from high inflation without causing an economic downturn, some critics also say the stock market has simply run too far, too fast in recent months and is due for at least a pause in its run.

READ: Fed minutes cite lower inflation risks, ‘overly restrictive’ policy

In energy trading, benchmark U.S. crude added 69 cents to $73.39 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $2.32 a barrel on Wednesday as worries flared over the risk that the Israel-Hamas war might spread to other parts of the Middle East.

Brent crude, the international standard, added 57 cents to $78.82 a barrel.

In currency trading, the U.S. dollar rose to 143.77 Japanese yen from 143.29 yen. The euro cost $1.0931, up from $1.0922.