Asian Shares Fall On Inflation, Earnings Worries

Asian stocks ended mostly lower on Tuesday as investors fretted about the earnings outlook in the face of economic and financial challenges.

A rebound in commodity prices on the back of a weaker dollar and IBM’s reduced cash flow forecast served to keep underlying sentiment cautious.

Chinese shares ended little changed as China stepped up daily cash injections and data showed new Covid-19 cases in China jumped to 699 on Monday – the highest daily tally since May 22.

China’s central bank injected additional liquidity into the financial system for the first time since June as authorities try to prevent a crisis of confidence in the housing market. Hong Kong’s Hang Seng Index ended 0.9 percent lower at 20,661.06.

Japanese shares bucked the weak trend to end notably higher as traders returned to their desks after a holiday on Monday.

The Nikkei 225 Index closed 0.7 percent higher at 26,961.68 ahead of this week’s Bank of Japan policy meeting, where the central bank is expected to stay firm on easy policies. The broader Topix climbed 0.5 percent to 1,902.79.

Kawasaki Heavy Industries surged 5.2 percent and Mitsubishi Heavy Industries rallied 2.5 percent after Nikkei reported that the government will forego setting a ceiling on defense spending in next fiscal year’s annual budget. Utilities Kansai Electric Power and Tokyo Electric Power dropped 2-3 percent.

Seoul stocks edged lower to snap a two-day winning streak on concerns about aggressive monetary policy tightening and its impact on economic growth. The Kospi slipped 0.2 percent to close at 2,370.97.

Australian markets fell as the minutes of the RBA’s July meeting showed the board remains committed to doing what is necessary to curb inflation. The benchmark S&P/ASX 200 Index dropped 0.6 percent to 6,649.60, while the broader All Ordinaries Index ended 0.5 percent lower at 6,853.

Tech stocks paced the declines, with Block Inc. falling 2.9 percent. Healthcare stocks also succumbed to selling pressure, with CSL, Sonic Healthcare and Resmed losing 2-5 percent. Whitehaven Coal jumped 5.3 percent after forecasting a record A$3 billion profit.

Across the Tasman Sea, New Zealand’s benchmark NZX-50 Index finished marginally lower at 11,162.73.

U.S. stocks reversed course to end firmly in the red overnight, as a measure of homebuilder confidence plunged in July and reports emerged that Apple plans to slow hiring and spending growth ahead of a potential recession.

The Dow ended 0.7 percent lower, while the tech-heavy Nasdaq Composite and the S&P 500 both shed around 0.8 percent.

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