Toyota, Japan’s top automaker, said it will suspend production at 11 plants in Japan for three days, on top of reductions planned in February. Those cuts mean it will fall short of the 9 million vehicles planned for the fiscal year through March, despite healthy demand. Its shares fell 2.5 per cent on Friday. Tokyo’s Nikkei 225 index lost 537 points to 27,522.26 while the Hang Seng in Hong Kong gave up 0.6 per cent to 24,812.76. The Shanghai Composite index shed 0.8 per cent to 3,526.19. Hong Kong-traded shares in e-commerce giant Alibaba fell 4.2 per cent after a Chinese-made documentary suggested its financial arm might be implicated in a corruption probe. The S&/ASX 200 in Sydney dropped 2.3 per cent to 7,175.80. South Korea’s Kospi slid 1.1 per cent to 2,830.82. Thailand’s benchmark fell 0.5 per cent. On Thursday, a late-afternoon sell-off wiped out gains for stocks on Wall Street, sending major indexes deeper into losing territory for the year.
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On Friday, Asian equities were lower after a late-afternoon sell-off on Wall Street wiped out gains. After Toyota Motor Corp. reported production restrictions due to parts shortages, Tokyo lost 0.9 percent. Other important regional markets have also experienced a drop. Oil prices fell, with the benchmark crude in the United States falling as high as 2.3 percent. The 10-year Treasury yield dipped to 1.78 percent on Friday from 1.83 percent late Thursday. Investors are prepared for increased interest rates, and stocks are on track to lose weekly in what has been a losing month so far. The rise in coronavirus cases has heightened concerns about supply chain issues that are impacting industry.
The S&P 500 lost 1.1 per cent to 4,482.73, a three-month low, with nearly 85 per cent of stocks in the index falling. It’s now down 6 per cent for the year. The Nasdaq composite index fell 1.3 per cent to 14,154.02, after rising as much as 2.1 per cent. By Wednesday, the index’s recent losses had left it in what Wall Street considers a market correction, or 10 per cent below its peak. More than 500 Nasdaq stocks hit 52-week lows Thursday, including Starbucks and T-Mobile. Apple fell 1 per cent and chipmaker Nvidia shed 3.7 per cent.
The Dow Jones Industrial Average sank 0.9 per cent to 34,715.39. The sharp about-face for the broader market was once again directed by technology stocks, which have been behind choppy trading throughout the week. Meta Platforms dropped 1 per cent and Lowe’s lost 4.6 per cent. The downturn follows a strong 2021, when the S&P 500 gained 26.9 per cent. The Labour Department provided a disappointing update, reporting that the number of Americans applying for unemployment benefits rose to its highest level in three months as the fast-spreading omicron variant continued to disrupt the job market. The job market has had a rocky recovery from the virus pandemic though the unemployment rate fell last month to a pandemic low of 3.9 per cent.
Investors are closely watching to see how employment data might affect the Federal Reserve approach to weaning the economy of its support by raising interest rates. The Fed is now expected to raise rates earlier and more often than it had previously signalled to fight inflation that is threatening the economic recovery. Supply chain problems and higher raw materials costs have prompted businesses to raise prices on finished goods, leading consumers to eventually rein in spending. The latest round of corporate earnings is also giving investors a clearer picture of where Americans are spending money and how inflation is impacting the economy. American Airlines fell 3.2 per cent and United Airlines slipped 3.4 per cent after warning investors that the latest surge in COVID-19 cases will hurt their finances early in 2022. Both airlines reported losses for the fourth quarter, though they were smaller than analysts’ expected.
Peloton shares lost nearly 24 per cent after CNBC reported the company is temporarily halting production of its treadmills and exercise bikes after seeing demand for the equipment fall. The company’s shares soared early in the pandemic as people exercised at home, but have dropped 85 per cent since closing at an all-time high of USD 167.42 on Jan. 13, 2021. In other trading, US crude oil lost USD 1.61 to USD 83.94 per barrel in electronic trading on the New York Mercantile Exchange. It shed 25 cents to USD 85.80 on Thursday. Brent crude oil, the basis for pricing international oil, lost USD 1.43 to USD 86.93 per barrel. The U.S. dollar fell to 113.83 Japanese yen from 114.10 yen late Thursday. The euro rose to USD 1.1327 from UDS 1.1313.