HONG KONG (AP) – Asian stocks were mostly lower Tuesday as investors stuck to a holding pattern as they awaited more corporate earnings and a European Central Bank policy meeting later in the week.
KEEPING SCORE: Japan’s benchmark Nikkei 225 index added 0.7 percent to 16,619.76 as the market had a delayed reaction to the yen’s weakness after it reopened following a holiday. Other Asian indexes slid, with South Korea’s Kospi losing 0.4 percent to 2,012.19, Hong Kong’s Hang Seng sliding 0.6 percent to 21,666.40 and the Shanghai Composite Index in mainland China shedding 0.8 percent to 3,020.39. Australia’s S&P/ASX 200 slipped 0.5 percent to 5,433.10. Benchmarks in Taiwan and Singapore also fell.
GLOBAL OUTLOOK: Investors are anticipating a slew of events this week that they’ll assess to get a better read on the state of the world economy and what it might mean for stock markets. British data set for release starting later Tuesday will provide an update on how the country’s economy is doing after the Brexit vote. A slew of U.S. corporate earnings are also expected throughout the week, while the ECB’s policy rate decision is Thursday, with markets expected to be volatile ahead of the announcement. Australia’s central bank, meanwhile, released minutes of its July meeting showing that officials downplayed the risk of Britain’s Brexit vote to the world economy while noting that inflation remained weak, which analysts believe could open the way for policy easing.
ANALYST VIEWPOINT: “The market has put two and two together after release of the more detailed (Reserve Bank of Australia) minutes and concluded that the probability of an August rate cut has increased,” Ric Spooner of CMC Markets in Sydney said in a report. However, he added that “the stock market is struggling to get enthusiastic. This reflects a degree of caution as traders assess the odds of further gains.”
SOFTBANK SOFTNESS: Shares in Japanese technology company Softbank Group Corp. slumped 10 percent one day after it announced that it is buying Britain’s ARM Holdings for 24.3 billion pounds ($32 billion) in a bid to expand into the “Internet of Things” – or connected home devices. Investors were apparently unhappy that SoftBank is paying a 43 percent premium to ARM’s closing share price last week.