Asian markets fell on Friday as a broadly positive week drew to a close with investors pricing in the likelihood that US Federal Reserve officials would start withdrawing the vast financial support put in place at the start of the COVID-19 pandemic.
The fast-spreading Delta variant of SARS-CoV-2, which is forcing governments to introduce containment measures, and the Chinese government’s campaign to tighten its grip on the world’s No. 2 economy were also playing on sentiment.
Data on Thursday showed that US producer prices rose more than twice as much as forecast month-on-month last month, while the annual rate hit a record, reinforcing traders’ belief that the blockbuster economic recovery is putting huge pressure on inflation.
The figures ramped up expectations that the Fed, in a bid to prevent overheating, would start reducing its colossal bond-buying program earlier than it had thought.
“Global investors are assessing the implications of the spread of the Delta virus, the possible tapering by the Fed, and China’s clampdown,” Federated Hermes head of global equities Geir Lode said. “With equity markets almost doubling since the start of the pandemic and a bull market lasting over a decade, investors are questioning how far the bull market can rally.”
“We therefore think that the inflation risk is on the upside and that the Fed will start tapering at the end of the year,” he added.
However, while the ultra-cheap borrowing that has been key to propelling the pandemic rally for more than a year looks likely to end, traders remain broadly upbeat, with the Fed — and other central banks — likely to take time withdrawing the support.
Traders will be keeping a hawk-like eye on Fed Chairman Jerome Powell’s speech at this month’s gathering of central bank and finance leaders in Jackson Hole, Wyoming, hoping for a hint at when he will act.
Wall Street’s three main indices ended at record highs again Thursday, but Asia struggled to follow suit.
In Taipei, the TAIEX closed down 237.83 points, or 1.38 percent, at 16,982.11. Turnover totaled NT$378.896 billion (US$13.6 billion). It dropped 3.1 percent from a week earlier.
Seoul’s KOSPI declined 1.16 percent to 3,171.29, down 3.03 percent week-on-week.
In Hong Kong, the Hang Seng dropped 0.48 percent to 26,391.62, but was up 0.81 percent from a week earlier.
The Shanghai Composite Index shrank 0.24 percent to 3,516.30, finishing the week up 1.68 percent.
In Japan, the Nikkei 225 lost 0.14 percent to 27,977.15, rising 0.56 percent from a week earlier, while the broader TOPIX gained 0.15 percent to 1,956.39, posting a weekly increase of 1.40 percent.
Bangkok and Jakarta all fell, with Manila’s PSEi Index losing 3.61 percent on fears over a fresh COVID-19 surge in the Philippine capital.
Sydney and Wellington rose, while Mumbai hit a new record, with the SENSEX breaking past 55,000 points for the first time. It rose 1.08 percent to 55,437.29, up 2.14 percent on the week.
Additional reporting by staff writer, with CNA
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the