Nikkei slips, but stocks surge in Seoul and Taipei
Asian stock markets were mixed Monday amid U.S.-China tensions and concern a recovery from the coronavirus pandemic might be weakening.
Japan’s Nikkei NIK, 0.00% fell 0.4%, as traders returned from a four-day holiday weekend. Hong Kong’s Hang Seng index HSI, +0.52% retreated 0.1%, as the Shanghai Composite SHCOMP, 0.60% gained 0.1%. South Korea’s Kospi 180721, 1.19% jumped 1.2% and Taiwan’s Taiex Y9999, -0.15% surged 2.6%, powered by big gains from Taiwan Semiconductor 2330, 1.77% . Benchmark indexes in Singapore STI, 0.31% and Indonesia JAKIDX, -0.15% advanced, and Australia’s S&P/ASX 200 XJO, 0.02% rose 0.2%.
Wall Street ended last week down after a new diplomatic flare-up between Washington and Beijing and mixed earnings reports.
Global markets have regained most of this year’s losses but forecasters warn the rebound might be too big and too early as virus case numbers rise in the United States and some other economies.
Weak stock prices “speak volumes of soured risk appetite amid escalating U.S.-China risks, worsening virus outbreaks and a flagging recovery,” said Hayaki Narita of Mizuho Bank in a report.
On Friday, Wall Street’s benchmark S&P 500 index SPX, +0.74% lost 0.6% to 3,215.63. The Dow Jones Industrial Average DJIA, +0.43% slid 0.7%, to 26,469.89. The Nasdaq composite COMP, +1.67% fell 98.24 points, or 0.9%, to 10,363.18.
Investors were rattled by the latest U.S.-Chinese diplomatic feud. The Trump administration told Beijing last week to close its consulate in Houston. China responded by ordering the closure of the U.S. consulate in the southwestern city of Chengdu.
That adds to strains over trade, technology, Hong Kong and human rights that have sent relations between the two biggest global economies plunging to their lowest level in decades.
Investors also are worried about a rise in U.S. layoffs as spiking coronavirus infections lead more businesses to shut down. Extra unemployment benefits expire this week. Congress has yet to agree on more economic aid.
In energy markets, benchmark U.S. crude CLU20, -0.05% was unchanged at $41.29 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 22 cents on Friday to settle at $41.29. Brent crude BRNU20, 0.28% , used to price international oils, lost 8 cents to $43.70 per barrel in London.
The dollar USDJPY, 0.20% gained to 105.54 yen from Friday’s 105.97.