Asia-Pacific Markets Diverge from Wall Street Gains
- Japan's stock market has reached new highs coinciding with South Korea's core inflation rate falling short of expectations.
- The reported core inflation in South Korea for June was 2.4%, below the 2.7% forecast by economists.
- This economic disparity may influence investor sentiment and market performance in the Asia-Pacific region.
Asia-Pacific markets experienced a downturn on Tuesday, diverging from the positive momentum seen on Wall Street, where the Nasdaq Composite reached a new record, buoyed by strong performances from tech giants like Microsoft, Apple, and Nvidia. The Nasdaq advanced 0.83%, closing at 17,879.3, while traders in Asia reacted to South Korea's inflation rate, which registered at 2.4% for June, falling short of the anticipated 2.7%. In Japan, the Nikkei 225 rose by 1.12%, closing at a three-month high of 40,074.69, and the broader Topix index increased by 1.15%, reaching a fresh 34-year high of 2,856.62. The Topix is now less than 30 points away from its all-time closing high set in December 1989. However, the Japanese yen weakened significantly, trading at 161.67 against the dollar, marking a 38-year low. Analysts expect the Bank of Japan to announce a reduction in bond purchases as part of a quantitative tightening strategy. Conversely, South Korea's Kospi index fell by 0.84% to 2,780.86, and the small-cap Kosdaq dropped 2.04% to 829.91 following the inflation report. In Hong Kong, the Hang Seng index saw a modest increase of 0.33%, while mainland China's CSI 300 declined by 0.18%. Longfor Group's shares rose by 3.36% after the company repurchased $219.6 million in notes. Australia's S&P/ASX 200 also faced a decline, falling 0.42% to 7,718.2, as the Reserve Bank of Australia released minutes from its June meeting, indicating discussions on potential interest rate hikes but ultimately deciding to maintain rates at 4.35%. Board members acknowledged the challenges in achieving inflation targets while sustaining full employment.