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Hong Kong’s Hang Seng leads losses as Asia Pacific stocks fall; Australia retail sales rise

SINGAPORE — Hong Kong shares led losses in Asia on Wednesday after Wall Street’s negative lead. Investors will also be looking forward to Japan’s consumer confidence data release.

Hong Kong’s Hang Seng index declined 1.65% while the Hang Seng Tech index dropped 2.94%.

In South Korea, the Kospi dropped 1.72%, while the Kosdaq fell 1.37%.

South Korea’s consumer sentiment index fell, standing at 96.4 for June 2022, down 6.2 points from May’s print, according to Bank of Korea’s survey.

The Nikkei 225 in Japan was down about 1%, and the Topix slipped 0.77%. Retail sales in Japan rose 3.6% in May compared to a year ago, a third consecutive month of growth, government data showed.

I’m still optimistic on a 12-month view, but for the next three or four months, I think there’s more downside
Shane Oliver
Chief Economist, AMP

Australia’s S&P/ASX 200 was about 1% lower. Retail sales in Australia rose 0.9% in May compared to April, the same increase in April from March.

MSCI’s broadest index of Asia-Pacific shares declined around 1.21%.

Shane Oliver, chief economist at AMP, said markets will remain vulnerable until there’s more certainty about whether a recession can be averted.

“Even if we don’t have a recession, we’re gonna see quite a significant slowdown in global growth, in growth in Asia, and that’s going to weigh on company profits, so I suspect there is more downside,” he told CNBC’s “Squawk Box Asia” on Wednesday, adding that the market may only bottom in September or October.

“I’m still optimistic on a 12-month view, but for the next three or four months, I think there’s more downside,” he said.

U.S. stocks gave up early gains to decline overnight following disappointing economic data. The consumer confidence index fell to 98.7 in June from 103.2 in May, according to The Conference Board.

The Dow Jones Industrial Average dropped 491.27 points, or 1.56%, to 30,946.99. The S&P 500 slipped 2.01% to 3,821.55, and the Nasdaq Composite was the laggard, declined 3% to 11,181.54.

Later today, Japan will release its consumer confidence data.

China quarantine changes

Elsewhere in the region, China cut the quarantine period for international travelers on Tuesday, in a step away from its strict Covid controls that have been in place for more than two years.

People arriving from overseas will now need to quarantine for seven days upon arrival and three days at home, compared to up to 21 days in a centralized facility previously.

Mainland Chinese markets closed higher on Tuesday, but the Shanghai Composite slipped 0.57%, and the Shenzhen Component declined 0.77% on Wednesday.

Trip.com‘s U.S.-listed shares popped nearly 11% on Tuesday, and extended gains in after hours trade. Cathay Pacific‘s stock closed 6.4% higher on the news on Tuesday, but declined 1.28% on Wednesday.

China Eastern and China Southern airlines both rose more than 5% on Tuesday, but fell on Wednesday.

Bloomberg also reported, citing people familiar with the matter, that Hong Kong’s incoming administration is considering reducing mandatory hotel quarantine to five days, down from seven.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 104.418, bouncing back from below 104 earlier this week.

The Japanese yen weakened past the 136 level against the dollar again, after strengthening and holding steady in the past few sessions. It last changed hands at 136.11. The Australian dollar was at $0.6902.

Oil futures fell in Asia’s morning trade. U.S. crude futures were down 0.77% at $110.90 per barrel, while Brent crude lost 1.01% to $116.79per barrel.

— CNBC’s Evelyn Cheng contributed to this report.

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