Why Asian Markets Remained Mixed Despite Strong China Export Data
- 3 days ago
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Asian markets traded mixed on Friday after a modest retreat on Wall Street, with gains in China and Hong Kong offsetting losses in Japan, South Korea and Taiwan.
By Sakshi Singh
New Delhi, August 7: Asian markets traded mixed on Friday after a modest retreat on Wall Street, with gains in China and Hong Kong offset by losses in Japan, South Korea and Taiwan. Rising oil prices weighed on investor sentiment, while China reported robust export growth and investors continued to assess the latest corporate earnings.
Selling in chipmakers and other stocks linked to the artificial intelligence (AI) boom appeared to ease slightly, as Tokyo's Nikkei 225 fell 0.3 per cent to 65,500.10.
The Kospi in South Korea dropped 0.8 per cent to 6,242.88, while Taiwan's Taiex declined 0.4 per cent.
The Shanghai Composite Index rose 0.8 per cent to 3,931.54 after China reported its exports grew at a slightly slower, but still robust, pace of about 24 per cent in July, driven by strong demand for electronics and other high-tech products. China's trade surplus narrowed last month, while imports also slowed.
Hong Kong's Hang Seng Index edged 0.2 per cent higher to 25,582.34.
In Australia, the S&P/ASX 200 slipped less than 0.1 per cent to 9,265.20.
On Thursday, US stocks declined as oil prices rose and another round of corporate earnings reports was released.
The S&P 500 fell 0.2 per cent, the Dow Jones Industrial Average dropped 0.9 per cent, and the Nasdaq Composite slipped 0.1 per cent.
Brent crude rose nearly 4 per cent on Thursday as uncertainty persisted over reopening the Strait of Hormuz, a key route for global oil supplies.
Iran has said it is close to reaching an agreement with Oman to reopen the strait. US President Donald Trump has also previously said a deal is near, although negotiations have repeatedly stalled over the past five months.
Reopening the strait may require a compromise, as the Trump administration has ruled out Iran charging transit fees, while Tehran insists on retaining some level of control.
Background: Crude Oil Prices
As of early Friday, Brent crude, the international benchmark, was up 1.6 per cent at USD 83.78 a barrel. US benchmark West Texas Intermediate (WTI) crude gained 1.2 per cent to USD 78.22 a barrel.
About one-fifth of the world's traded oil and natural gas once passed through the Strait of Hormuz. Oil prices have surged to as high as USD 113 during the conflict, fuelling inflation by increasing fuel and shipping costs.
Despite concerns over the conflict and a potential bubble in AI-related investments, strong corporate earnings have helped ease fears that US equities are overvalued.
Corporate Earnings
Around 85 per cent of S&P 500 companies have reported earnings, with overall profit growth on track to be the strongest since 2021.
Warner Bros. Discovery rose 1.7 per cent after reporting better-than-expected earnings, while Molson Coors gained 1.3 per cent following encouraging quarterly results.
Honeywell Aerospace plunged 23.2 per cent after missing analysts' expectations, while digital advertising company AppLovin dropped 19.7 per cent after reporting mixed quarterly results.
Outside earnings, SpaceX rose 6.1 per cent after more than 911 million shares held by early investors and employees became eligible for sale following the expiry of the lock-up period.
SpaceX shares climbed as high as USD 225 after the company's June market debut but have since fallen below their initial public offering price of USD 135. The stock is currently trading at around USD 115.
The latest US employment report for July is due later on Friday.
Although the labour market remains resilient, hiring has slowed. A report on Thursday showed unemployment benefit claims increased last week, although layoffs remain historically low. Employers added just 57,000 jobs in June.
In early Friday trading, the US dollar slipped to 158.35 Japanese yen from 158.42 yen, while the euro was little changed at USD 1.1524.
(With AP Inputs)
