Stock market today: Asian shares shrug off Wall St blues as China leaves lending rate unchanged

Markets in Asia, excluding Shanghai, were broadly higher on Monday, steering clear of Wall Street blues after major tech stocks recorded their worst week since the 2020 COVID crash.

Oil prices fell while US futures advanced.

Hong Kong’s Hang Seng led the region, gaining 1.6% to 16489.08. But the Shanghai Composite index fell 0.5% to 3,050.89 after the People’s Bank of China left 1- and 5-year prime rates unchanged.

Tokyo’s Nikkei 225 rose 0.4% to 37,219.47 and the yen weakened further. The US dollar rose to 154.69 yen from 154.59 yen, trading at levels not seen since 1990.

South Korea’s Kospi rose 0.8% to 2,613.61.

The Australian S&The P/ASX 200 rose 1% to 7,640.30.

On Friday the S&The P500 fell 0.9%, completing its third consecutive losing week. The price ended at 4,967.23, which is 5.5% lower than the record high at the end of last month.

That’s its longest streak since September, before it erupted into a romp that sent it to a string of records this year.

The Dow Jones Industrial Average rose 0.6% to 37,986.40, and the Nasdaq index fell 2% to 15,282.01.

The worst-performing market included several stocks that had been its biggest stars until now. Super Micro Computer lost more than a fifth of its value, falling 23.1%. The company, which sells server and storage systems used in AI and other computing, was up nearly 227% over the past year.

Nvidia, another stock that has soared to dizzying heights as a result of Wall Street’s frenzy over artificial intelligence technology, has also given up some of its big recent gains. It dropped 10% and was the heaviest weight on the S&P500, by far for its huge size.

Technology stocks in the S&The P500 lost 7.3% overall this week, marking its worst performance since March 2020, after some global giants reported discouraging trends. For example, ASML, a Dutch company that is a major supplier to the semiconductor industry, reported weaker than expected orders for early 2024.

The bigger threat was an emerging, dispiriting recognition on Wall Street that interest rates could likely remain high for longer.

Top Fed officials said this week they could keep rates at their high levels for a while. That is a letdown for traders after the Fed previously indicated that three interest rate cuts would be possible this year.

High interest rates negatively impact the prices of all types of investments. Among the hardest hit tend to be those stocks that are considered the most expensive and that make investors wait the longest for big growth, which can make tech stocks vulnerable.

Fed officials are adamant that they want to see additional evidence that inflation is moving toward its 2% target before cutting the Fed’s key interest rate, which is at its highest level since 2001.

Since interest rates seem unlikely to help much in the short term, companies are under even greater pressure to deliver profit growth.

Netflix fell 9.1% despite reporting stronger-than-expected earnings for the latest quarter. Analysts called it a mostly solid performance, but the streaming giant disappointed some investors by saying it will stop providing updates on its subscriber numbers every three months starting next year.

Helping to limit market losses was American Express, which rose 6.2%. It reported stronger earnings for the latest quarter than analysts expected. Fifth Third Bancorp rose 5.9% after also beating expectations.

In the oil market, benchmark U.S. crude lost 68 cents to $81.54 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, oil prices rose 12 cents to $82.22 per barrel.

A barrel of Brent crude lost 72 cents to $86.57 per barrel. On Friday, it retreated to $87.29 after briefly rising above $90 overnight on concerns about fighting in the Middle East. Iranian forces fired air defenses at a major air base and a nuclear site in an apparent Israeli drone attack, raising concerns in the market. But crude oil prices pared their gains as traders wondered how Iran would respond.