Asian stock markets have been declining for two days in a row. Today, they have already dropped by 2.3%. Only the S&P/ASX 200 increased slightly by 0.09%. Other stock indices closed in negative territory. The Nikkei 225 declined by 0.32% and the Shanghai Composite fell by 1%. The Shenzhen Composite and the KOSPI sank by 1.1% and 1.09%, respectively. The Hang Seng Index decreased the most by 2.3%.
As usual, Asian stock indices are sensitive to market sentiment on Wall Street. The US three benchmark indices also dropped yesterday following the hawkish remarks of Fed policymakers who backed further tightening. Traders expected the central bank to switch to a softer stance in the fight against soaring inflation. However, the Fed remains strongly committed to monetary tightening. In addition, investors remain concerned about the consequences of severe restrictions imposed by the Chinese authorities to curb the rapid spread of coronavirus.
On the Hong Kong stock exchange, the shares of Netease, Inc. (-9.5%), Zhongsheng Group Holdings, Ltd., (-8.1%), and Alibaba Health Information Technology, Ltd. (-7.8%) showed the largest drop.
Despite the fact that Tencent Holdings, Ltd. managed to increase its net profit by 1%, to 39.9 billion yuan compared to the same period last year, its stock tumbled by 0.6%.
Market participants were also concerned about Japan's trade balance report for October. The trade balance rose to 2.16 trillion yen from the September reading of 2.04 trillion. However, it undershot analysts' estimates. They had expected the figure to total 2.23 trillion. Exports expanded by 25.3%, which also turned out to be lower than the September indicator of 28.9%. It fell short of the expectations of a 28.1% increase.
Japan's imports in October soared by 53.5%, to a record high of 11.165 trillion yen, which exceeded the forecast. Analysts had expected the indicator to amount to 49.7% and to 45.7% in September. Notably, the reading has been rising for a year and a half.
Among the Japanese companies, the biggest losers were Sumitomo Metal Mining Co., Ltd. (-4.7%), Advantest, Corp. (-3.7%), and Tokyo Electron, Ltd. (-3%).
The shares of companies included in the KOSPI also dipped. Samsung Electronics stock lost 1.9%, and Hyundai Motor shares dived down by 1.2%.
According to the latest statistics, the unemployment rate in Australia decreased to 3.4% in October compared to the September figure of 3.5%. At the same time, the indicator fell short of analysts' estimates who had expected it to grow to 3.6%.
The S&P/ASX 200 also slid in the red zone. BHP stock dropped by 1.6% and Rio Tinto shares slipped by 1.8%. At the same time, the shares of the largest Australian banks climbed: the National Bank of Australia (+0.9%), the Commonwealth Bank of Australia (+0.7%), the Australia and New Zealand banking Group (+0.5%), and Westpac Banking (+0.2%).