Asian shares down on caution after modest US gains
TOKYO — Asian shares mostly fell Thursday as caution set in over company earnings reports, recent choppy trading in technology stocks and prospects for more economic stimulus for a world battling a pandemic.
Japan’s Nikkei 225 slipped 0.6% in early trading to 28,473.26, while South Korea’s Kospi dropped 1.2% to 3,091.58. Australia’s S&P/ASX 200 slipped 0.6% to 6,785.10. Hong Kong’s Hang Seng lost 0.6% to 29,108.59, while the Shanghai Composite was down 0.4% to 3,501.88.
Also on market players’ minds is the global vaccine rollout, which is becoming more organized in the U.S., but yet to play out in much of Asia, except for China, where the pandemic started.
“As the rally waned for the U.S. market, Asia markets can be seen left to their own devices into the Thursday session, and it appears that investors may be locking in some of the recent gains,” said Jingyi Pan, a senior market strategist for IG in Singapore.
Wall Street ended with modest gains, with the S&P 500 inched up 3.86 points, or 0.1%, to 3,830.17, after swinging between a gain
of 0.6% and a loss of 0.3%. The tiny gain extended the benchmark index’s winning streak to a third day.
The Dow Jones Industrial Average gained 36.12 points, or 0.1%, to 30,723.60. The techheavy Nasdaq slipped 2.23 points, or less than 0.1%, to 13,610.54. The index had briefly been above its alltime high set last week.
Smaller companies
fared better than the broader market. The Russell 2000 small-caps index rose 8.26 points, or 0.4%, to 2,159.70. The index is up 9.4% this year, while the S&P 500 is up about 2% and the Nasdaq is up 5.6%.
Energy, communications and financial stocks helped lift the market. Those gains were primarily kept in check by declines in companies that rely on consumer spending and technology stocks.
Investors continued to watch shares of companies such as GameStop and AMC Entertainment, which have been targeted by a community of online investors seeking to force their stock prices higher. Both stocks rose modestly after plunging over the last two days. Both companies have been in the spotlight for more than two weeks as investors pushed the stocks to astronomical levels.
GameStop and other recently high-flying stocks notched modest gains Wednesday. GameStop rose 2.7% and AMC climbed 14.7%. The stocks have been caught up in a speculative frenzy by traders in online forums who seek to inflict damage on Wall Street hedge funds that have bet the stocks would fall. GameStop plunged 60% on Tuesday, and AMC Entertainment lost 41.2%.
“There’s a tug of war that’s been brewing for a week or so now, that markets are ripe for a correction and whether the events of last week are a precipitating event,” said Jamie Cox, managing partner at Harris Financial Group.
Stocks have been mostly rallying this week, an encouraging start to February after a late fade in January as volatility spiked amid worries about the timing and scope of another round of stimulus spending by the Biden administration, unease over the effectiveness of the government’s coronavirus vaccine distribution and turbulent swings in GameStop and other stocks hyped on social media