Asian shares mostly lower after US stocks fall back

Asian shares have mostly declined after indexes shuffled lower on Wall Street

Asian shares mostly declined Thursday after stock indexes shuffled lower on Wall Street

Japan s benchmark Nikkei 225 dipped 0.3% to finish at 29,598.66, although it had momentarily picked up after major business daily Nikkei reported Prime Minister Fumio Kishida will propose Friday a government stimulus package totaling a record 55.7 trillion yen ($488 billion). The rally quickly ran out of steam as more sobering concerns, such as the coronavirus pandemic, weighed in.

Australia's S&P/ASX 200 edged up 0.1% to 7,379.20, while South Korea s Kospi slipped 0.4% to 2,952.19. Hong Kong's Hang Seng dropped 1.3% to 25,312.09. The Shanghai Composite shed 0.4% to 3,525.09.

“Without a positive lead from Wall Street overnight and a relatively quiet day in terms of economic data, sentiments in the region may be on hold, potentially leading to some sideways movement,” said Yeap Jun Rong, a market strategist at IG in Singapore.

Recent government data have shown the coronavirus pandemic continues to hurt the Japanese economy. A supply crunch in chips and other parts needed to produce autos, a mainstay of the world's third-largest economy, is one reason.

The damage to consumer spending brought on by recent government measures to close restaurants early and open theaters to limited crowds is another factor. Japan has never had a lockdown but has called periodically for a “state of emergency” to curb the spread of infections.

Junichi Makino, chief economist for SMBC Nikko Securities, said the Japanese recovery that many initially expected to begin this year may not come until fiscal 2022, which begins in April.

“But extreme pessimism is not called for. Auto production will likely get back to normal by the October-December quarter,” he said.

Investors are also watching the Bank of Korea policy-setting meeting scheduled for next week for whether the central bank will raise its key rate. Policymakers have hinted at such a move.

On Wall Street, the S&P 500 fell 0.3% to 4,688.67 and is sitting just 13.03 points below its all-time high set a week and a half ago.

The Dow Jones Industrial Average sank 0.6% to 35,931.05, and the Nasdaq composite lost 0.3%, to 15,921.57.

Stocks have been powering mostly higher over the last month as companies have widely reported much stronger profits for the summer than analysts expected.

Inflationary pressures — and how much they hit companies' bottom lines— are under the microscope, with many companies warning their profit margins could suffer due to supply-chain problems and higher costs for everything from workers' wages to raw materials.

A report on the housing market showed some of those pressures. Builders broke ground on fewer homes last month than in September, contrary to economists' expectations for growth. But the number of building permits rose by more than expected, perhaps showing that homebuilders see those pressures eventually easing.

In energy trading, benchmark U.S. crude fell 72 cents to $77.64 a barrel in electronic trading on the New York Mercantile Exchange. It shed $2.40 to $78.36 per barrel on Wednesday. Brent crude, the international standard, lost 45 cents to $79.83 a barrel.

In currency trading, the recent stall in the dollar's rally has put some Asian markets in a wait-and-see mood. The U.S. dollar rose to 114.22 Japanese yen from 114.14 yen. The euro slipped to $1.1319 from $1.1322.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama