Asia-Pacific Markets Follow Wall Street's Lead with Losses

Stocks in the Asia-Pacific region declined, following the downward trend of Wall Street the previous night as investors anticipated the coming year.

The Nikkei 225 in Japan experienced a 0.94% decrease, closing at 26,093.67, while the Topix dropped 0.72% to 1,895.27. South Korea's Kospi saw a 1.93% decrease to 2,236.4, due to the country's retail sales for November declining 1.8%, which was the third consecutive month of decreases, reversing the gains seen in the third quarter. The S&P/ASX 200 in Australia also experienced a 0.97% decrease, closing at 7,020.1.

The Hang Seng index in Hong Kong experienced a 0.97% decrease in its last hour of trading, even though more Covid-19 restrictions were lifted today. Investors were paying close attention to stocks related to the re-opening process. Later in the day, the city will release its trade data.

On the mainland of China, the Shanghai Composite index dropped 0.44% to 3,073.7 while the Shenzhen Component index finished lower at 10,996.4.

The United States government has declared that all airline passengers coming from China, Hong Kong, and Macau must present a negative Covid test result beginning on January 5th, regardless of their nationality or if they have been vaccinated.

On Wall Street, the major indexes ended the day lower as investors prepared for the last few trading days of 2022. Apple had a particularly negative impact on the Dow, dropping to a new 52-week low after breaking a key level.

The National Press and Publication Administration of China recently approved the licensing of 44 imported games, which is a departure from the country's long-standing policy of not issuing new licenses.

On Thursday, stocks of video game companies from South Korea experienced an increase in trading in Asia.

Netmarble experienced a surge of more than 17%, while Kakao Games saw an increase of 5.81%. NCSOFT and Nexon rose by 3.34% and 4.38%, respectively. On the other hand, the Hong Kong-listed shares of NetEase dropped by 2.97%, while Tencent gained 2.2%.

The Bank of Japan has taken action to try and keep yields from rising by making two unexpected purchases of Japanese government bonds, as stated in a notice.

The central bank announced that it would purchase an unlimited amount of two- and five-year notes at a fixed rate. Additionally, it stated that it would buy 600 billion yen ($4.5 billion) of bonds with a maturity of one to 10 years.

The Bank of Japan recently announced that it will begin buying Japanese Government Bonds (JGBs) every business day at a rate of 0.5% starting on December 20th.

The 10-year Japanese Government Bond (JGB) yield has decreased to 0.465%, a 0.22% drop. This is due to the inverse relationship between bond yields and prices.

Last week, the central bank increased the range of acceptable yields for 10-year Japanese Government Bonds (JGBs) to 0.5% on either side of its 0% target, up from the previous range of 0.25%.

According to government data, South Korea's retail sales decreased by 1.8% on a year-over-year basis in November, which is a further decline from the 0.2% drop seen in October.

Industrial production saw a slight increase of 0.4% in the month, which was a recovery from the four consecutive months of decreases that had occurred prior.

Economists surveyed by Reuters anticipate that South Korea will publish its consumer price index on Friday, which is expected to show a further decrease in inflation to 5%.

Oil prices experienced a slight decrease as China's resurgence of Covid cases and the strain on medical resources have dampened the optimism of the nation's reopening and the outlook for fuel demand.

Brent crude futures decreased by 0.46%, settling at $82.88 per barrel. Additionally, the U.S. West Texas Intermediate declined by 0.49%, settling at $78.58 per barrel.

Vishnu Varathan of Mizuho Bank commented in a note that the narrative of China re-opening may be hindered by the recent surge in Covid cases in the country. He also cautioned that the re-opening should not be interpreted as a sign of permanent protection from the potential of a global recession.

Stocks of many of Apple's suppliers in Asia dropped after the tech giant's stock hit a new low for the past year.

Taiwan Semiconductor Manufacturing Company, a major supplier of chips to Apple, experienced a 1.55% decrease in its stock. Largan Precision saw a 1.66% drop, and Foxconn's shares declined by 1.91%.

LG Electronics and Samsung experienced a decrease in their stocks of 2.57% and 1.59% respectively. SK Hynix saw a drop of 0.92%.

In Japan, the stock of Nidec decreased by 1.42% during the morning session, and Alps Alpine also declined by 1.5%.At the end of the day in the United States, Apple's stock dropped by approximately 3%.

According to Reuters, Italy's health minister has announced that all travelers coming from China will be required to take a Covid test. This comes after two flights from China to Milan revealed that nearly half of the passengers tested positive for the virus.

The exact steps to be taken with those who test positive upon arrival have not been made clear, according to Reuters.

The United Kingdom is reportedly considering implementing mandatory testing for those arriving from China, following the United States' announcement of the same measure. This was reported by the Telegraph.

The tech industry has had a difficult year, leaving many investors questioning when the stocks will recover.

He outlines the reasons for his stock recommendations and provides the names of the stocks to purchase.

Kraken, a digital currency exchange, has declared that it will be ending its services in Japan by the end of next month and will be deregistering from the Financial Services Agency of Japan on January 31, 2023.

The exchange attributed its decision to a combination of "current market conditions in Japan" and a "globally weak crypto market".

Kraken made the decision as part of their plan to focus their resources and investments on areas that will help them achieve their long-term goals.

In the last 24 hours, Bitcoin has seen a decrease of 0.64%, trading at $16,571.12, as reported by Coin Metrics. Ether has also experienced a dip of 1.18%, now at $1,193.34.

On Wednesday, a federal health official declared that airline passengers coming into the United States from China must present a negative Covid test result.

Starting on January 5th, all travelers aged two and up from China, Hong Kong, and Macau must abide by the new rule, regardless of their nationality or vaccination status.

China has been attempting to maintain a zero Covid policy for a longer period of time than other major countries, but recently, after loosening its public health restrictions, the nation has experienced a surge in infections.

On Wednesday, Apple's stock dropped below the $129 mark, setting a new low for the past year.

Analysts often use Apple, the company with the highest market capitalization, as a benchmark for the stock market as a whole and a major factor in investor sentiment.

Todd Sohn, a technical analyst at Strategas, commented that the current market situation is not ideal. He noted that the end of the year can be a strange time, but if the trend continues into the first few weeks of the new year, it is likely to be a genuine issue.

Apple's stock dropped to $126.41 in the early hours of Wednesday before bouncing back. By the afternoon, the stock had recovered to $127.15.

Sohn noted that if the biggest weight in the market is weak and reaching new lows, that is not a good sign. He added that the top performer is not performing well either. Additionally, the five largest market cap names are still declining. However, he pointed out that the impact on the S&P 500 index is decreasing.

As China begins to lift many of its Covid-19 restrictions, investors may see this as a potential buying opportunity in the world's second-largest economy.

Investors have been buying up Chinese stocks in response to recent events, with the belief that the Chinese economy could experience a surge in 2023. This is in contrast to the U.S. and Europe, which are still feeling the effects of monetary tightening that could impede economic growth.

According to Carlos Asilis, co-founder and CIO at Glovista Investments, many institutional investors have not been investing heavily in Chinese equities.

I believe this was a misstep, as it disregarded the possibility of the Chinese economy experiencing a similar rebound in 2021 as the US did this year. This is now being taken into account, he continued.