Shares fell Thursday in Asia after a retreat on Wall Street as crude oil prices slipped on expectations that supply might outpace demand.
Benchmarks fell more than 1% in Tokyo and Hong Kong. On Wednesday, the S&P 500 fell 0.4% in its third straight loss though the index remains near its best level in 20 months.
A barrel of benchmark U.S. crude tumbled roughly 4%, to 4,549.34, on Wednesday as expectations built that the world has too much oil available for the slowing global economy’s demand. It sank below $70, down more than $20 since September. Brent crude, the international standard, fell 3.8% to $74.30 per barrel.
Early Thursday, U.S. crude was up 29 cents at $69.67 per barrel. Brent crude rose 31 cents to $74.61 per barrel.
China reported that its exports rose 0.5% in November, the first year-on-year month of increase since April, but imports fell.
China has been grappling with sluggish foreign trade this year amid slack global demand and a stalled recovery, despite the country’s reopening after its strict COVID-19 controls were lifted late last year. Economists said a holiday season rush of shipping likely helped push exports higher.
Tokyo's Nikkei 225 index fell 1.7% to 32,858.31. South Korea's Kospi edged 0.1% lower to 2,491.64.
The Hang Seng in Hong Kong fell 1% to 16,295.83 on renewed heavy selling of technology and property shares. The Shanghai Composite index dropped was flat at 2,969.49.
Australia's S&P/ASX 200 slipped 0.1% to 7,173.30. Bangkok's SET lost 0.6% and the Sensex in India fell 0.1%.
Wednesday on Wall Street, the Dow Jones Industrial Average fell 0.2%, to 36,054.43, and the Nasdaq composite lost 83.20, or 0.6%, to 14,146.71.
Energy stocks had the market’s worst drops by far. Halliburton sank 3.6%, and Marathon Oil fell 3.5%.
Losses for Big Tech stocks, which are some of Wall Street’s most influential, also weighed on the market. Nvidia dropped 2.3%, and Microsoft lost 1%.
But travel-related companies advanced as falling crude prices relieved expected cost pressures. Carnival rose 5.9%, and Royal Caribbean Line gained 3.4%.
Airlines also flew higher. Delta Air Lines climbed 3.5% after it told investors it’s sticking to its forecasts for revenue and profit for the end of 2023. United Airlines rose 3.4%, and Southwest Airlines gained 3%.
Shares of British American Tobacco sank 8.4% in London after the company said it will take a non-cash hit worth roughly 25 billion British pounds ($31.39 billion) to account for a drop in the value of its “combustible” U.S. cigarette brands. It’s moving toward a “smokeless” world, such as e-cigarettes.
Wall Street is betting the Fed’s next move will be to cut rather than raise interest rates. The Federal Reserve’s next meeting on interest rates is next week, and the widespread expectation is for it to leave its main interest rate alone at its highest level in more than two decades.
A report Wednesday said private employers added fewer jobs last month than economists expected. A cooling in the job market could remove upward pressure on inflation. A more comprehensive report on the job market from the U.S. government is due Friday.
A separate report said U.S. businesses increased how much stuff they produced in the summer by more than the total number of hours their employees worked. That stronger-than-expected gain in productivity more than offset increases to workers’ wages and also could help keep a lid on inflation.
“The market is currently in a consolidation phase as investors eagerly await the November U.S. employment report on Friday. This report is pivotal; if it indicates slowing inflation on wages and a weaker job market, it could fuel expectations for rate cuts in 2024,” Anderson Alves of ActivTrades said in a commentary.
In the bond market, Treasury yields were generally lower. The 10-year yield rose to 4.17% by early Thursday on a par with its level late Tuesday after it dipped to 4.11%. In October it was above 5%, at its highest level since 2007.
In currency dealings, the U.S. dollar fell to 146.63 Japanese yen from 147.34 yen. The euro fell to $1.0760 from $1.0763.
