SINGAPORE — Asia-Pacific markets reversed earlier gains and fell on the first day of the new quarter as investors digested positive data on factory activity from a private survey in China.
Japan’s Nikkei 225 fell 1.73 percent to 25,935.62 and the Topix fell 1.38 percent to 1,845.04. Fast Retailing fell 4%.
Sentiment among Japan’s major manufacturers worsened in the April-June period, according to the Bank of Japan’s quarterly survey of business sentiment. The main index of sentiment for major manufacturers came in at 9, down from the previous quarter’s reading of 14.
“Manufacturers are currently facing a number of headwinds, ranging from a surge in input costs to volatile supply conditions,” said Stephan Angrik, senior economist at Moody’s Analytics.
“A lot of it, of course, has to do with Russia’s invasion of Ukraine and China’s Covid-19 lockdown,” he told CNBC’s “Squawk Box Asia” on Friday.
In South Korea, the Kospi also reversed course to fall 1.17% to 2,305.42 and the Kosdaq was 2.14% lower at 729.48.
Australia’s S&P/ASX 200 was down 0.43%.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.03 percent.
Chinese markets
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Markets in Hong Kong were closed on Friday for a holiday as the city marks the 25th anniversary of its handover from the United Kingdom to China on Friday.
Chinese President Xi Jinping arrived in Hong Kong on Thursday. He presided over the inauguration of Hong Kong’s new chief executive John Lee on Friday.
This is Xi’s first trip outside mainland China since the Covid hit. Lee will replace outgoing leader Carrie Lam.
On Wall Street, US stocks closed the second quarter of the year lower. The S&P 500, which had its worst first half in more than 50 years, was down nearly 0.9 percent at 3,785.38.
Meanwhile, the Dow Jones Industrial Average fell 253.88 points, or 0.8%, to 30,775.43 and the Nasdaq Composite retreated 1.3% to 11,028.74.
As the U.S. economy slows and consumers spend less, cash flow for companies will take a hit and stocks are likely to fall further, according to Rebecca Patterson, chief investment strategist at Bridgewater Associates.
“We think stocks will be challenged in the second half of the year in the US. We are still quite bearish,” she told Squawk Box Asia.
Currencies
The U.S. dollar index, which tracks the greenback against a basket of peers, was at 105.081.
The Japanese yen was trading at 135.07 to the dollar after briefly weakening above the 137 level earlier this week. The Australian dollar was at $0.6814.
Oil futures gave up gains to trade mostly flat. U.S. crude lost 0.2 percent to $105.55 a barrel, while international benchmark Brent crude was slightly above flat at $109.05 a barrel.
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