Asian markets are trading cautiously on Wednesday, despite yesterday’s significant rise of Wall Street for the second consecutive day, while the dollar has strengthened against a basket of currencies.
The MSCI Asia-Pacific index, excluding Japan, was down 0.2 percent around 7:00 AM.
Meanwhile, the Nikkei index on the Tokyo Stock Exchange rose 0.6 percent, while stock prices in Australia increased by 0.4 percent. In South Korea, Shanghai, and Hong Kong, however, they fell between 0.2 and 1.2 percent.
Chinese markets are under pressure this morning due to slowing economic growth, a consequence of the zero-tolerance COVID-19 policy, and issues in the real estate market.
After the Chinese statistical office postponed the release of the gross domestic product report yesterday, it has today postponed the release of housing price data.
As a result, Asian investors were not impressed by yesterday’s rise of Wall Street for the second consecutive day. The Dow Jones rose by 1.12 percent, while the S&P 500 increased by 1.14, and the Nasdaq index by 0.90 percent.
This is attributed to better-than-expected quarterly business results from several banks and companies, including Goldman Sachs and Lockheed Martin.
However, the business results are better than expected mainly because analysts have lowered their estimates due to high inflation, rising interest rates, and slowing economic growth.
Thus, analysts in a Reuters survey now estimate that the earnings of companies in the S&P 500 index rose by 2.8 percent in the third quarter compared to the same period last year.
At the beginning of July, they expected earnings growth of over 11 percent, and at the beginning of October, 4.5 percent.
This morning, U.S. futures indices are in the positive, following better-than-expected business results from Netflix, so an increase on Wall Street is expected for the third consecutive day this afternoon.
Dollar Strengthens, Oil Prices Recover Losses
And in the currency markets, the value of the dollar against a basket of currencies has increased.
The dollar index, which shows the value of the U.S. dollar against the other six major world currencies, is around 112.00 points, while yesterday at this time it was 111.80 points.
At the same time, the dollar’s exchange rate against the Japanese currency rose from yesterday’s 148.85 to 149.35 yen, the highest level since 1990.
However, the U.S. currency has weakened against the European currency, with the euro price reaching 0.9860 dollars, while yesterday it was 0.9840 dollars.
Oil prices, on the other hand, have risen after falling more than 3 percent yesterday. The price of a barrel in the London market strengthened this morning by 0.90 percent to 90.85 dollars, while in the U.S. market, a barrel increased by 1.50 percent to 84.05 dollars.
