Shares in Asia-Pacific ended mixed on Thursday
The Tokyo Stock Exchange closed today with a 0.33% decline in Nikkei, its main indicator. It resulted from the foreseeable extension of the state of health emergency due to coronavirus in Tokyo and eight other regions.
The Nikkei ended with a decline of 93.18 points to 28,549.01. At the same time, the Topix, a broader index including the securities with the highest capitalization, yielded 9.65% points or 0.5%, to 1911.02.
The prime minister to discuss extended emergency today
The Tokyo market reacted in this way to requests from Tokyo and other regions most affected by the fourth wave of infections to extend the state of a health emergency. This Friday, the central executive is expected to take a measure against it. Yoshihide Suga, Prime Minister of Japan, will declare a state of emergency today for the new coronavirus targeting nine prefectures, including Tokyo. It will expire on May 31.
Two months have left until the opening of the Olympic Games, which is scheduled in Tokyo. Meanwhile, the new extension of the emergency entails restrictions on bars and restaurants and the attendance of the public and sporting events.
Thus, the Nikkei broke a streak of five consecutive days of rises, which also led to the collection of profits among investors on Thursday.
Among the stocks with the highest capitalization, the tech giant Softbank lost 1.61%. At the same time, Toyota Motor, the Japanese automotive leader, climbed by 0.77%.
Nintendo’s video game company slipped by 1.91%. Fast Retailing, a multinational textile company that owns the chain of clothing stores Uniqlo, dropped by 0.55%.
The sectors that registered the most significant declines were steel, metal, shipping, and mining.
In the first section, 1,647 stocks closed with a decrease. 474 stocks closed with a rise, and 73 were unchanged.
The trading volume amounted to 5.59 trillion yen.
Seoul closes almost flat for the second day in a row
The Seoul Stock Exchange closed today almost flat for the second session in a row. Kospi, its main indicator, registered a fall of 0.09% in a session in which traders once again preferred to hold positions pending key data on the recovery.
The selective dropped by 2.92 points to 3,165.51. By contrast, the Kosdaq technology stock index advanced 0.83%, or 8.02 points, to close at 974.08 units.
The day started without enthusiasm, with the trading floor pending the release of consumption data in the US on Friday. It gives more indications about the pace of recovery and potential clues on inflation and a possible change of course in monetary policy.
In that sense, the Bank of Korea today improved its growth outlook for the Asian country by one-tenth, which caused sales.
Thus, the main values of the South Korean stocks returned to receive mixed closings.
Tech giant Samsung Electronics closed with a drop of 0.25%. Meanwhile, SK Hynix gained 2.03%.
Naver, the largest South Korean internet portal, fell by 1.38%. However, Kakao, the country’s leading instant messaging application owner, advanced by 4.6%.
Biopharmaceutical Samsung Biologics lost again. This time it yielded 2.16%, and its competitor Celltrion dropped by 0.55%.
Hyundai Motor, the largest national vehicle manufacturer, fell by 1.34%.
Hong Kong down by 0.2%
Hang Seng closed today with losses of 0.18% after information that Beijing has asked the digital giant Tencent to put its ‘fintech’ businesses in a financial affiliate that the government can more closely supervise.
The selective lost 52.81 points to 29,113.2, while the index that measures the behavior of mainland Chinese companies listed on the Hong Kong stock market, the Hang Seng China Enterprises, dropped by 0.07%.
Services and Commerce and Industry rose, and Real Estate and Finance fell.
In the latter sector, the most affected was the local subsidiary of the state-owned Bank of China, BOC Hong Kong. Meanwhile, in real estate, that questionable honor went to Country Garden.
Alibaba rose by 0.87%.
EuroStoxx 50 exceeded the S&P 500 in the 1st 5 months of 2021
The European stock market also likes the American investor this year. According to Morningstar, American investors have invested 2,800 million dollars in funds, and ETFs focused on this market in the first four months of the year.
The EuroStoxx 50 exceeded the S&P 500 in the first five months of the year, unprecedented since 2017. In May, the survey carried out by Bank of America among professional investors from around the world reflected that the eurozone is the more overweight region in portfolios at the moment, ahead of emerging markets and also the US.
The catalysts in favor
Analysts say there are many factors for Europe to behave better than the United States this year. They refer directly to the composition of the European indices, with a more significant bias towards cyclical sectors compared to the United States.
The most massive vaccination is now reaching Europe. The reopening of European economies is somewhat late, so in the second part of the year, we can see good numbers in companies that are more dependent on European GDP.
One reason that penalized the Old Continent in recent years – such as not having too much technology in its indices now plays in its favor. It is less sensitive to the sustained upturn in inflation over time. Among other things, they are affected by the increase in interest rates. Excessive inflation remains a remote threat in Europe, where significant output gaps remain the main task for the ECB.
Moreover, in Europe, the recovery funds have not been supported yet, and it is money that will transform economies. The interest rate policy is still very accommodative. The economy is going to have the first part of recovery and then another of expansion.
Entering the European stock market today is also cheaper than investing in the American one, although it has risen more this year. The profitability expectation of the European stock market is also higher, reaching 5.39% compared to 4.43% for the American one.
Due to all of the above, investors tend to prefer regions with greater weight in value, such as Europe, the United Kingdom, and Japan.
