Markets across Asia and the Pacific adopted a cautious stance on Thursday, with trading mixed on the eve of the US Federal Reserve’s high-profile symposium in Jackson Hole, Wyoming. Japan’s Nikkei 225 fell 1.51%, Taiwan’s Taiex led regional losses with a drop of 2.99%, and South Korea’s Kospi declined 0.63%. Australia’s ASX 200 was a rare gainer, edging up 0.25%. Hong Kong’s Hang Seng was flat (-0.04%) while mainland China’s Shanghai Composite advanced 0.66%. India’s Sensex and Singapore’s Straits Times Index were also slightly higher, up 0.18% and 0.26% respectively.
The US dollar strengthened to nearly 0.86 euros but weakened against the Japanese yen and British pound, falling to 147.25 yen and 0.74 pounds. European and US futures turned negative following an unexpected rise in UK inflation data. Market participants are also awaiting key Eurozone inflation figures and the minutes from the latest Federal Open Market Committee (FOMC) meeting. Speeches by ECB President Christine Lagarde in Geneva and Fed Governor Christopher Waller are also scheduled for the day.
In commodities, oil prices climbed with West Texas Intermediate (WTI) crude up 0.72% to $62.80 a barrel after an industry report (API) showed an unexpected drawdown in US inventories. Natural gas prices also turned higher, gaining 0.12% to €31.27 per megawatt-hour, while gold retreated 0.61% to $3,323.33 an ounce.
Selling pressure was particularly concentrated in the technology sector, which tanked the Taiwanese market. Shares of Apple supplier Hon Hai Precision (Foxconn) fell 3.61%, while Azurawawe Technologies plummeted 10%. The sell-off is fueled by investor sentiment that the sector’s rally since last April has driven stock valuations too high, too fast, signaling a time to take profits. All eyes are now on the message Fed Chair Jerome Powell will deliver in his keynote speech at Jackson Hole. In Tokyo, semiconductor equipment makers Advantest, Socionext, and Disco came under significant pressure, falling 5.57%, 7.1%, and 4.65% respectively.