SINGAPORE – Asia-Pacific markets fell on Friday as investors assess risks associated with new omicron Covid variant and anticipate key US inflation data
Japan’s Nikkei 225 extended losses from the previous session and fell 1% to 28,437.77. The Topix index fell 0.77% to 1,975.48.
In South Korea, the Kospi lost 0.64% to 3,010.23 while the Kosdaq lost 1.1% to 1,011.57.
Australian stocks also traded lower. The ASX 200 fell 0.42% to 7,353.50, with the energy sub-index falling 1.49% as global oil prices struggled for gains.
Energy names in Australia sold off: Santos shares fell 2.11%, Oil Search fell 2.42%, and Woodside Petroleum fell 0.72%.
In company news, Elizabeth Gaines, CEO of Fortescue Metal Group, will step down once her successor is found, as the miner transforms into a diverse player in renewable energy and resources. Fortescue shares fell 0.82%.
Mainland Chinese stocks also traded lower, with the Shanghai composite closing 0.18% at 3,666.35 while the Shenzhen component falling 0.24% to 15,111.56. .
In Hong Kong, the Hang Seng Index fell 1.07% to 23,995.72. The benchmarks in Singapore and India traded lower in the afternoon.
Friday’s session in Asia follows overnight declines on Wall Street.
“The more cautious tone in the risk market probably has as much or more to do with apprehension ahead of tonight’s US CPI report,” said Ray Attrill, head of currency strategy at National Australia Bank. , in a morning note.
Inflation data for the United States
While a surge in inflation is hardly new to the market, investors will be looking to see how high the level is and what kind of reaction might trigger from the US Federal Reserve.
“We expect the data to reinforce the fact that core inflation in the United States is both broad and high,” said Kim Mundy, senior economist and currency strategist at the Commonwealth Bank of Australia, in an early morning note. “It is important to note that another strong impression will reinforce the hawkish turn of FOMC Chairman Jay Powell last week.”
Last week, the Fed chairman said it was “probably a good time to remove” the word “transient” from describing inflation and promised that the central bank would be vigilant in controlling inflation.
At its policy meeting next week, the Fed is expected to announce that it will step up the pace of its reduction in bond purchases, while also likely hinting at a more aggressive path for interest rate hikes in 2022.
Currencies and commodities
In the currency market, the US Dollar traded almost flat against a basket of its peers, trading at 96.241. The index rose in the previous session from levels close to 95.967 to 96.271.
Analysts said new concerns about the impact of the omicron strain on the economic recovery likely supported the greenback overnight.
The Japanese yen weakened 0.09% to 113.54 per dollar, while the Australian dollar edged up to $ 0.7156.
Oil prices fell overnight, with Brent and US crude falling 1.9% and 2% respectively.
During Asian trading hours on Friday, oil prices struggled for gains – US crude traded slightly at $ 70.89 a barrel in the afternoon and the global benchmark Brent indexed. lost 0.28% to $ 74.21.