Asian shares tumbled Friday as reports showed layoffs of American workers are persisting at high levels after the U.S. economy contracted at a nearly 33% annual pace in the spring, the worst quarter on record.
Earnings reports, a gauge of how well businesses are managing the fallout from the coronavirus pandemic, added to the gloom. Some technology companies have bucked the trend and are showing positive results. But many companies are hurting.
Japan’s Nikkei 225
tumbled 2.3% while Hong Kong’s Hang Seng index
rose 0.2%. The Shanghai Composite
was about flat while the smaller-cap Shenzhen Composite
gained 0.3%. South Korea’s Kospi
slipped 0.2%, Taiwan’s Taiex
declined 0.3%, and Australia’s S&P/ASX 200
fell 1.6%. Markets in Singapore, Malaysia and Indonesia were closed for holidays.
August tends to be a lousy month for stocks, noted Stephen Innes of AxiTrader Corp.
“Stock markets are looking extraordinarily corrective to the extent that we could be entering a pullback phase as we head into August, most commonly referred to as the summer swoon,” Innes said in a commentary.
In one positive signal, China reported its manufacturing activity edged up in July and export orders strengthened despite weak U.S. and European demand. The monthly survey released Friday was another sign the world’s second-largest economy is gradually recovering from the coronavirus pandemic.
Central bank meetings for various countries are on the agenda for the coming week.
“Second-quarter GDP for Indonesia and the Philippines will also draw scrutiny, highlighting the impact of the pandemic,” said Bernard Aw, principal economist for IHS Markit in Singapore.
The Japanese government said late Thursday the nation’s economy was likely to sink 4.5% for the fiscal year ending in March 2021. It forecasts a return to growth in the following fiscal year.
Some companies are holding up better than others.
Japanese media reports said Toyota was on course to become the No. 1 automaker in the world again, overtaking Volkswagen, now the top manufacturer in global vehicle sales. Toyota’s sales were already recovering in markets like China, which is recovering from its early outbreaks of COVID-19, according to the company.
Overnight, the U.S. reported the economy contracted at a record-shattering 32.9% annual rate in April-June as pandemic shutdowns…
Go to the news source: Asian markets fall after grim U.S. GDP data