Asian stock markets concluded mostly in the red on Thursday, impacted by increased yields and ongoing uncertainty regarding the U.S. presidential election's outcome, which put pressure on the tech sector. However, Tesla's earnings, surpassing expectations, offered some reassurance to investors, helping to mitigate losses across the region.
The U.S. dollar remained close to three-month highs, fueled by heightened prospects of Donald Trump's potential return to the White House and speculation that the Federal Reserve might adopt a more cautious pace in its monetary easing measures.
Gold experienced a moderate uptick as demand for safe havens rose amid continued tension in the Middle East. Meanwhile, oil prices climbed over 1% in Asian trading, recovering from a decline on Wednesday prompted by reports of a greater-than-anticipated increase in U.S. crude oil inventories.
In China, the Shanghai Composite Index fell by 0.68% to close at 3,280.26, amid concerns that the U.S.-China tech conflict could escalate irrespective of whether Donald Trump or Kamala Harris secures the presidency on November 5th. Similarly, Hong Kong's Hang Seng Index slid 1.30% to 20,489.62.
Japan's markets overturned initial losses to finish with modest gains, and the yen depreciated broadly following a statement by the Bank of Japan's Governor Kazuo Ueda. He noted the increasing difficulty in predicting the magnitude of future borrowing cost rises.
Earlier, a private survey indicated that Japanese factory activity contracted for the fourth consecutive month in October due to subdued demand and weak order volumes. The Nikkei average inched up 0.10% to 38,143.29, whereas the broader Topix Index settled slightly lower at 2,635.57.
In South Korea, stocks experienced a noticeable decline after data showed that the country narrowly avoided a technical recession in the third quarter. The Kospi Index fell 0.72% to 2,581.03. Notably, Korea Zinc shares surged nearly 30%, following the company's completion of a tender offer for its own shares the previous day.
Australian markets slightly dipped after the PMI Manufacturing Index reached a 53-month low in October. The benchmark S&P/ASX 200 index dropped 0.12% to 8,206.30, while the broader All Ordinaries index decreased by 0.26% to 8,453.90. Tech shares led the downturn, with WiseTech Global experiencing a 6.3% decline.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX-50 index saw a slight increase of 0.21%, closing at 12,814.07.
In the U.S., stocks tumbled overnight as rising bond yields and election uncertainty drove a sell-off in major technology companies. The 10-year Treasury yield reached its highest level in almost three months, amid expectations that the Federal Reserve might opt for a more restrained approach to rate cuts. Consequently, the Dow Jones Industrial Average fell by 1%, the S&P 500 declined 0.9%, marking a third consecutive day of losses, and the tech-centric Nasdaq Composite slid 1.6%.
