Bank of Korea’s Decision Affected Stocks Around the Region
Stocks in Asia-Pacific mostly declined in spite of overnight gains on Wall Street, while the Bank of Korea raised its interest base rate by 25 basis points to 0.75% for the first time in three years. Thus, South Korea became the first main economy to raise interest rates during the pandemic. The Covid-19 pandemic is not over yet in South Korea, but its economy has become increasingly resilient to outbreaks, as companies learned to live with Covid-19.
The central bank’s decision affected South Korean stocks. The Kospi dropped 0.58% end its trading day at 3,128.53. Meanwhile, the Kosdaq advanced 0.26% to close at 1,020.44. The local currency fell against the dollar following the rate hike, trading at around 1,168.84.
Stocks around Asia-Pacific
Markets around the region broadly struggled on Thursday. In Australia, the ASX 200 dropped 0.54% to 7,491.20 as the situation in the country continued to influence investor sentiment.
The country’s new daily cases of Covid-19 surpassed 1,000 on Thursday for the first time since the beginning of the pandemic. Australia’s largest city Sydney is trying to stamp out a surge in the fast-spreading Delta variant. Sydney is the capital of New South Wales and the state reported 1,029 new locally acquired cases. Out of 1,029 new Covid-19 cases, 969 were detected in greater Sydney. Two main hospitals of the city had to set up emergency outdoor tents to cope with the surge in patients.
Despite various challenges, shares of the country’s flag carrier Qantas advanced 3.49%, beating the broader benchmark. The company’s CEO Alan Joyce said the airline plans to resume international travel by Christmas. His comment helped to boost the company’s shares.
In Japan, the Nikkei 225 closed near the flatline at 27,742.28 and the Topix index was little changed at 1,935.35.
In Hong Kong, the Hang Seng index fell 1.32% while the tech-heavy Hang Seng Tech index dropped 2.17%. The tech index fell as shares of Alibaba dropped 1.4% and Meituan declined about 1% and Apple’s supplier AAC Tech dropped 11%.
Mainland Chinese stocks also declined on Thursday. The Shanghai composite dropped 1.09% to 3,051.66 while the Shenzhen component fell 1.92% to 14,415.46.
U.S. stocks rose on Wednesday. The Dow Jones Industrial Average added 39.24 points, or 0.1%, 35,405.50. The S&P 500 gained 0.2% to a new closing high of 4,496.19. The Nasdaq Composite advanced 0.1% to 15,041.86, also a new closing high.
