Asian stocks fall on concerns over Pelosi’s visit to Taiwan | International

TOKYO (AP) — Asian stocks were mostly down on Tuesday on concerns about regional stability, as U.S. House Speaker Nancy Pelosi’s planned visit to Taiwan prompted threats from Beijing. .

Benchmarks headed lower across the region in early trading, including Japan, China, South Korea and Australia.

China considers Taiwan its own territory and has repeatedly warned of “serious consequences” if the reported trip to island democracy continues. Pelosi said she is traveling to Singapore, Malaysia, South Korea and Japan for talks on a variety of topics, including trade, COVID-19, climate change and security.

Although there was no official announcement, local media in Taiwan reported that Pelosi will arrive on Tuesday evening, making her the highest ranking American to visit in more than 25 years.

“Sentiment of risk has taken a hit following reports suggesting that US House Speaker Pelosi is due to continue her visit to Taiwan. Investors are likely to look for defensive positions as the geopolitical situation could worsen over the next few days,” said Anderson Alves of ActivTrades.

Japan’s benchmark Nikkei 225 was down 1.6% in morning trade to 27,546.58. Australia’s S&P/ASX 200 fell 0.5% to 6,956.00. The South Korean Kospi slipped 0.7% to 2,435.58. Hong Kong’s Hang Seng fell 2.9% to 19,582.17, while the Shanghai Composite plunged 2.4% to 3,183.44.

“The first great relief will be Pelosi’s safe arrival in Taiwan, followed by his safe departure. Neither side wants a real war, but the risk of an accident or even the escalation of a war game aggressive is real, which could always lead to a tactical error,” said Stephen Innes, managing partner at SPI Asset Management.

The surge in COVID-19 infections in some regions, including Japan, remains a major concern. The shutdowns and restrictions on economic activity have caused severe damage to regional economies, disrupting supply chains for major manufacturers, stifling tourism and closing restaurants.

On Wall Street, stocks gave up early gains and closed slightly lower as investors entered another busy week of corporate earnings and economic reports.

The S&P 500 gave up an early gain to end down 0.3% at 4,118.63. The Dow Jones Industrial Average fell 0.1% to 32,798.40 and the Nasdaq 0.2% to 12,368.98. Smaller company stocks also gave up some of their recent gains, pushing the Russell 2000 0.1% to 1,883.31.

Bond yields have mostly fallen. The 10-year Treasury yield, which influences mortgage rates, fell to 2.60% from 2.65% on Friday evening.

August’s subdued open follows a strong rally in equities last month: July was the best month for the S&P 500 since November 2020. But this week’s slew of economic and corporate earnings reports has left traders “a little cautious,” said Chief Lindsey Bell. markets and currency strategist at Ally Invest.

“Investors are still evaluating where we deviate from here – forward or reverse,” Bell said.

Banks, healthcare companies and technology stocks were among the top weightings in the S&P 500. JPMorgan Chase fell 1%, UnitedHealth Group 1.3% and Intuit 1.7%.

US crude oil prices fell 4.8%, dragging energy stocks lower. Exxon Mobil lost 2.5%.

These losses offset strong gains by retailers and consumer goods manufacturers. Target rose 1.3% and Procter & Gamble rose 2.9%.

Boeing jumped 6.1% to the S&P 500’s biggest gain after clearing a key hurdle with federal regulators and could soon resume deliveries of its large 787 jetliner.

Stocks fell for much of the year as investors worried about high inflation and rising interest rates. A major concern remains whether central banks will raise interest rates too aggressively and push economies into a recession.

A report released last week showed the US economy contracted in the last quarter and could be in recession. The recent rally in equities came as worrying economic reports gave some investors confidence that the Fed can slow its aggressive pace of rate hikes sooner than expected.

More than half of S&P 500 companies have released their latest results, most of which were better than expected. Many companies have also warned that inflation is hurting consumer spending and squeezing operations. Companies have raised their prices to try to maintain their profits.

Wall Street will also receive several updates on the labor market, which has remained strong. The Labor Department will release its June job openings and labor turnover survey on Tuesday and its closely watched monthly jobs report for July on Friday.

A spike in oil prices throughout the year only compounded the impact of inflation. U.S. crude oil prices have risen about 25% in 2022, pushing U.S. gasoline prices to record highs.

In energy trading, benchmark U.S. crude fell 66 cents to $93.23 a barrel in electronic trading on the New York Mercantile Exchange. Brent, the international standard, fell 86 cents to $99.17 a barrel.

In currency trading, the US dollar fell slightly to 130.68 Japanese yen from 131.64 yen. The Euro traded at $1.0271, down from $1.0263 previously.

AP Business Writers Damian J. Troise and Alex Veiga contributed.

Yuri Kageyama is on Twitter