Asian stocks experienced a decline on Wednesday as investors analyzed business data from Japan and Australia. This followed a relatively stable performance by U.S. stocks as major companies began reporting their earnings for the season.
U.S. futures were down, while oil prices saw an increase. Japan's Nikkei 225 index dropped by 1.1% to 39,154.85, with the Japanese yen strengthening ahead of an upcoming Bank of Japan policy decision. The yen's recent appreciation came after interventions to halt its decline, with expectations of a potential interest rate hike by the BOJ and a rate cut by the Federal Reserve contributing to the currency's support.
Meanwhile, a business survey revealed a contraction in Japan's factory activity in July due to weak demand, although the services sector showed growth, boosting overall private sector activity in the country.
In other parts of Asia, Hong Kong's Hang Seng index fell by 1.1%, led by the Hang Seng Tech Index's 1.6% decline. The Shanghai Composite also decreased by 0.5%. Australia's S&P/ASX 200 edged 0.1% lower, with weaker growth in the services sector offsetting slight improvements in manufacturing.
South Korea's Kospi index dropped by 0.6%, driven by a 2.2% decline in Samsung Electronics following unsuccessful negotiations with its workers' union. The union had declared an indefinite strike earlier in the month to push for higher pay and benefits.
In the U.S., the S&P 500, Dow Jones Industrial Average, and Nasdaq composite experienced slight declines, while the Russell 2000 index continued its upward trend, rising by 1%. The market saw mixed trading as companies reported their spring results, with expectations of strong profit growth for S&P 500 companies.
Despite challenges in the housing industry due to high mortgage rates, there are hopes for interest rate cuts in the future as inflation slows. This could provide relief for the economy and financial markets.
On the commodities front, U.S. benchmark crude oil prices rose to $77.36 per barrel, while Brent crude, the international standard, reached $81.40 per barrel. The euro weakened slightly against the dollar.
