Asian stocks experienced a downward trend on Friday, with Japan’s Nikkei 225 leading the losses by plunging over 2% in early trading. This decline was primarily driven by the sharp drop in Wall Street, which had been fueled by high expectations. Meanwhile, United States futures and oil prices saw an upward trajectory.
The Bank of Japan’s decision to maintain its benchmark rate at 0.25% was in line with market expectations. Consequently, the Japanese yen traded lower against the dollar, with the exchange rate rising to 152.50 yen from 152.00 yen.
China’s markets, however, defied the overall downturn sentiment. The Hang Seng in Hong Kong recorded a gain of 0.8%, reaching 20,473.16, while the Shanghai Composite index initially rose in morning trading but slipped 0.1% in the afternoon, closing at 3,276.52. This positive performance can be attributed to China’s factory activity, which returned to growth in October. The official manufacturing purchasing managers’ index reached 50.1, marking the end of five consecutive months of contraction. Another private survey also indicated expansion, with a reading of 50.3.
Australia’s S&P/ASX 200 dropped 0.5% to 8,118.80 after the country’s producer price index for the third quarter showed a year-on-year growth of 3.9%. This figure marked a return to below 4.0% annual growth for the first time since September 2023, according to data from the Australian Bureau of Statistics.
South Korea’s Kospi lost 0.5% at 2,543.04, while Taiwan’s Taiex experienced a 0.2% decline, weighed down by a 0.5% drop in Taiwan Semiconductor Manufacturing Corp., a key supplier for Apple. Apple’s quarterly earnings report revealed a decrease in sales revenue from China, contributing to the negative sentiment.
On Thursday, the S&P 500 suffered its worst day in eight weeks, sinking 1.9% to 5,705.45. The Dow Jones Industrial Average dropped 0.9% to 41,763.46, and the Nasdaq composite tumbled 2.8% to 18,095.15, marking its second consecutive loss after setting a new all-time high.
Microsoft reported better-than-expected profit growth for the latest quarter, along with revenue that exceeded forecasts. However, the company’s stock still declined by 6% as investors and analysts searched for potential disappointments. Similarly, Facebook’s parent company, Meta Platforms, delivered a strong profit report, but its stock fell 4.1% due to concerns over increased spending on artificial intelligence development.
The decline in Big Tech stocks on the last day of October erased the S&P 500’s gains for the month. The index fell 1%, marking its first down month in the past six, despite reaching an all-time high during that period.
In the bond market, Treasury yields fluctuated before ultimately edging lower following a mixed set of reports on the U.S. economy. One report indicated a slowdown in the measure of inflation preferred by the Federal Reserve, while another highlighted a deceleration in wage and benefit growth. However, a third report showed a decrease in the number of workers applying for unemployment benefits, suggesting relatively low layoff rates across the country. The yield on the 10-year Treasury fell to 4.27% from 4.30%.
U.S. benchmark crude oil gained $1.32 to reach $70.58 per barrel on the New York Mercantile Exchange, while Brent crude, the international standard, surged $1.32 to $74.13 per barrel. The euro fell slightly against the dollar, with the exchange rate dropping to $1.0873 from $1.0885.