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Risk-off sentiment persisted after Fitch unexpectedly cut the U.S. sovereign rating earlier this week, which also saw investors lock in profits in markets which outperformed substantially earlier this year. India and Japan in particular saw a heavy amount of selling this week.
Japan’s Nikkei 225 index fell 0.3% on Friday, and was set to lose over 2% this week, while futures for India’s Nifty 50 index pointed to a mildly positive open. But the Nifty was also down 1.4% for the week.
Chinese stocks rose past most of their regional peers on Friday, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes up 0.4% and 0.3%, respectively. Hong Kong’s Hang Seng index added 0.9% on a rebound in heavyweight technology stocks.
China’s top economic committees said in a joint statement on Friday that the government will unlock more measures to boost consumer spending and improve local liquidity. But officials once again offered no major details on the planned stimulus, which saw Chinese markets trim a bulk of their earlier gains.
While the prospect of more stimulus measures has somewhat supported Chinese stocks in recent sessions, a lack of concrete details from the government has soured investor expectations.
Business activity data released this week showed that the Chinese economy started the third quarter on a weak note, pointing to little relief after growth slowed substantially in the second quarter.
Broader Asian markets retreated on Friday, with investors remaining largely risk-averse ahead of key U.S. nonfarm payrolls data due later in the day. Any signs of resilience in the jobs market gives the Fed more headroom to keep raising interest rates, which bodes poorly for Asian markets.
Australia’s ASX 200 fell 0.2%, while South Korea’s KOSPI and the Taiwan Weighted index were flat. The two technology-heavy bourses took mixed cues from iPhone maker Apple Inc’s (NASDAQ:AAPL) second quarter results, although shares of the latter fell 1% in aftermarket trade.
Regional markets also took weak cues from a negative overnight finish on Wall Street, as Treasury yields surged in anticipation of Friday’s jobs report.
