Nikkei sinks 2% despite business sentiment hitting 3-year high
Asian markets tumbled Friday on the tail of Wall Street’s worst monthly loss since the beginning of the pandemic.
Tokyo’s Nikkei 225 JP:NIK skidded 2% and Australia’s benchmark ASX/S&P 200 AU:XJO sank 1.9%. South Korea’s Kospi slid 1.2%, and benchmark indexes in Singapore SG:STI, Taiwan TW:Y9999 and Indonesia ID:JAKIDX fell as well. Markets in Shanghai and Hong Kong were closed for holidays.
The S&P 500 ended September down 4.8%, its first monthly drop since January and the biggest since March 2020.
After climbing steadily for much of the year, the stock market has become unsettled in recent weeks with the spread of the more contagious delta variant of COVID-19, surging long-term bond yields and word that the Federal Reserve may start to unwind its support for the economy.
A quarterly survey by the Bank of Japan found business sentiment among Japanese manufacturers has risen to its highest level in nearly three years.
The results of the “tankan” survey, released Friday, found sentiment among large manufacturers rose to 18 from 14. That’s the highest level since late 2018. The reading for nonmanufacturers edged up only slightly, to 2 from 1.
However, it and various other surveys have found manufacturers struggling with shortages of computer chips and other components, amid disruptions to supply chains and shipping that might crimp the recovery from the pandemic.
The S&P 500 SPX lost 1.2% on Thursday, ending the month 4.8% lower in its first monthly drop since January and the biggest since March 2020, when the viral outbreak rattled markets as it wreaked havoc with the global economy. The benchmark index is still up 14.7% for the year.
The Dow Jones Industrial Average DJIA shed 1.6% to 33,843.92, while the Nasdaq COMP slid 0.4% to 14,448.58.
Bond yields edged lower. The yield on the 10-year Treasury note, a benchmark for many kinds of loans, fell to 1.48% from 1.50% from late Wednesday. It was as low as 1.32% just over a week ago.
n other trading Friday, U.S. benchmark crude oil CLX21 lost 23 cents to $74.80 per barrel in electronic trading on the New York Mercantile Exchange. It rose 18 cents to $75.03 per barrel on Thursday.
Brent crude oil BRNX21 gave up 29 cents to $78.02 per barrel.
The dollar USDJPY was virtually unchanged at 111.28 Japanese yen.