Asian stocks experienced a mostly downward trend on Friday morning, following a sharp decline on Wall Street driven by high expectations. Japan’s benchmark Nikkei 225 lost over 2% in early trading, sinking to 38,196.53. The Bank of Japan’s decision to keep its benchmark rate unchanged at 0.25% was in line with market expectations. The Japanese yen traded lower against the dollar, which rose to 152.35 yen from 152.00 yen.
In contrast, China’s markets bucked the trend, with the Hang Seng in Hong Kong adding 1.0% and the Shanghai Composite index rising 0.4%. This positive sentiment was fueled by the growth of factory activity in China, as the official manufacturing purchasing managers’ index reached 50.1 in October, ending five consecutive months of contraction. Another private survey also indicated growth, with a reading of 50.3.
Australia’s S&P/ASX 200 dropped 0.8% after its producer price index in the third quarter rose 3.9% year-on-year, marking 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 remained virtually unchanged, while Taiwan’s Taiex lost 0.8%, weighed down by a 1% decline in Taiwan Semiconductor Manufacturing Corp., a major chip supplier for Apple. This decline followed Apple’s quarterly earnings report, which revealed a drop in sales revenue from China.
On Thursday, the S&P 500 experienced its worst day in eight weeks, sinking 1.9% to 5,705.45 and falling further from its record set earlier in October. The Dow Jones Industrial Average dropped 0.9%, while the Nasdaq composite tumbled 2.8% for a second-straight loss after setting its latest all-time high.
Despite Microsoft reporting better-than-expected profit growth and revenue, its stock fell 6% as investors and analysts searched for potential disappointments. Similarly, the parent company of Facebook, Meta Platforms, delivered a better-than-expected 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 gain for the month, resulting in its first down month in the past six, despite reaching an all-time high during that period.
In the bond market, Treasury yields edged lower following a mixed set of reports on the U.S. economy. The 10-year Treasury yield fell to 4.27% from 4.30% late Wednesday, although it remains significantly higher than the mid-September level of around 3.60%.
U.S. benchmark crude oil gained $1.33 to reach $70.59 per barrel, while Brent crude, the international standard, surged $1.23 to $74.04 per barrel. The euro fell slightly against the dollar, trading at $1.0878.