Asian shares trading mixed after Wall Street’s momentum cools

TOKYO / WAM/ AP

Asian shares were mixed in muted trading on Tuesday, as buying in some markets was soon erased by profit-taking. Japan’s benchmark Nikkei 225, where computer chip-related issues had interested investors early, reversed course to slip nearly 0.2 percent on Tuesday trading to 40,336.31.
Australia’s S&P/ASX 200 fell 0.1 percent to 7,801.20. South Korea’s Kospi added 1.2 percent to 2,771.23. Hong Kong’s Hang Seng gained 0.6 percent to 16,563.58, while the Shanghai Composite added 0.2 percent to 3,030.76. Analysts have been watching various global uncertainties, including in the Middle East and Russia, that affect energy prices as well as investor sentiments.
In energy trading, benchmark US crude rose 26 cents to US$82.21 a barrel. Brent crude, the international standard, added 22 cents to US$86.97 a barrel.
Wall Street edged back further from its recent record heights, with the S&P 500 slipped 15.99 points, or 0.3 percent, to 5,218.19 in a quiet day of trading. The Dow Jones Industrial Average fell 162.26, or 0.4 percent, to 39,313.64, and the Nasdaq composite dropped 44.35, or 0.3 percent, to 16,384.47. The big run last week was Wall Street’s best of the year and sent all three indexes to records on Thursday. Stocks climbed as the Federal Reserve indicated it is still likely to deliver several cuts to interest rates this year, as long as inflation keeps cooling.
That has the S&P 500 on track for another winning month in what has been a nearly unstoppable run since late October.
The strength has been durable as the economy has remained resilient, “but the longer the market goes up without a notable pullback, the closer we come to such a move taking place,” according to Chris Larkin, managing director, trading and investing at E-Trade from Morgan Stanley.
For the market to continue rallying, more companies will need to deliver strong earnings growth to justify high prices, say strategists at Morgan Stanley.
This week’s highlight for financial markets may be Friday’s report on US consumer spending. It will also include the latest update on the measure of inflation that the Federal Reserve prefers to use. Despite a string of recent reports that showed inflation remaining hotter than expected, the Federal Reserve seems to expect inflation to continue its longer-term cooling trend. In the bond market, Treasury yields climbed. The 10-year yield rose to 4.24 percent from 4.20 percent on Friday. In currency trading, the U.S. dollar edged down to 151.29 Japanese yen from 151.41 yen. The euro cost US$1.0843, little changed from US$1.0840.