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On Thursday, Asia-Pacific markets exhibited mixed performances in response to the sell-off in Wall Street after Fitch downgraded the long-term credit rating of the United States from AAA to AA+.
Hong Kong’s Hang Seng index declined by 0.41% in its final hour of trade, while mainland Chinese markets managed to reverse earlier losses. The Shanghai Composite closed up by 0.58% at 3,280.46, and the Shenzhen Component rebounded by 0.53% to close at 11,163.42. This rebound in Chinese markets was supported by the Caixin survey, which indicated that the services sector expanded at a stronger pace in July compared to June.
In Japan, the Nikkei 225 experienced a significant drop of 1.68%, leading the losses in the region, and closed at 32,159.28. The Topix also fell by 1.45% to end at 2,268.35.
South Korea’s Kospi declined by 0.42% to finish the day at 2,605.39, but the Kosdaq showed strength, rising by 1.16% to end at 920.32. South Korean internet giant Kakao reported a 44% decrease in its second-quarter net profit, which initially led to a slide in its shares, but the stock later recovered some ground.
Meanwhile, in Australia, the S&P/ASX 200 slid by 0.58%, closing at 7,311.8, after the country’s June trade balance came in above expectations. The mixed performances in the Asia-Pacific markets were influenced by the uncertainties surrounding the U.S. credit rating downgrade and other economic data releases.
On the third straight day of decline, the S&P 500 continued to tick lower as Wall Street assessed the latest corporate earnings results and faced pressure from rising bond yields.
The S&P 500 fell by 0.25% to close at 4,501.89, while the Dow Jones Industrial Average experienced a loss of 66.63 points, or 0.19%, ending at 35,215.89. The Nasdaq Composite also inched down by 0.1% to 13,959.72.
Yields on the benchmark 10-year Treasury rose, trading around 4.18%, reaching its highest level since November 2022. This increase in bond yields put pressure on the real estate sector, which dropped more than 1%. Additionally, the Cboe Volatility index, often referred to as the “VIX” or “fear index,” spiked to its highest level since June, indicating increased market uncertainty and nervousness among investors. Utilities also experienced losses, declining by 2.3%. These movements reflect the market’s sensitivity to changes in interest rates and the potential impact on various sectors and asset classes.
On Thursday, oil prices saw a gain of about 2% following steps taken by Saudi Arabia and Russia to maintain tight supplies into September and potentially beyond.
Brent futures rose by $1.94, or 2.3%, settling at $85.14 a barrel, while U.S. West Texas Intermediate crude rose by $2.06, or 2.6%, settling at $81.55.
The lack of significant price movements in recent weeks resulted in Brent’s historic 30-day close-to-close futures volatility dropping to its lowest level since February 2022.
In the diesel market, U.S. diesel futures also rose by about 2%, reaching their highest settlement since January 2023.
On the other hand, gold prices remained near a more than three-week low on Thursday, influenced by a strong dollar and elevated bond yields. Investors continued to be cautious ahead of the release of July U.S. nonfarm payrolls data.
Spot gold remained flat at $1,933.80 per ounce, after reaching its lowest level since July 11. U.S. gold futures settled 0.3% lower at $1,968.80. The robust dollar and rising bond yields put downward pressure on gold prices, which are often seen as a safe-haven asset in times of economic uncertainty.
The above analysis is only for the views of market researchers and is for reference only and is not regarded as a specific investment suggestion.