On Tuesday, the Japanese stock market halted a two-day decline, during which it fell over 970 points, equivalent to a 2.5 percent drop. The Nikkei 225 closed slightly above the 40,080-point level. However, it is anticipated to decline again on Wednesday.
The outlook for Asian markets is currently negative due to renewed concerns regarding interest rate expectations. While European markets displayed mixed results, U.S. markets experienced a downturn, setting a likely negative precedent for Asian markets to follow.
The Nikkei saw a significant increase on Tuesday, buoyed by gains in financial stocks and automobile manufacturers, although technology stocks showed mixed performances. The index ended the day up 776.25 points, or 1.97 percent, closing at 40,083.30 after ranging between 39,584.36 and 40,288.80.
In terms of individual stock performances, Nissan Motor rose by 0.93 percent, Mazda Motor edged up 0.37 percent, Toyota Motor increased by 1.36 percent, and Honda Motor saw a rise of 1.62 percent. Softbank Group advanced 1.20 percent, Mitsubishi UFJ Financial jumped 3.28 percent, Mizuho Financial increased by 2.19 percent, and Sumitomo Mitsui Financial rallied with a 2.25 percent gain. Conversely, Mitsubishi Electric fell by 0.35 percent, Sony Group climbed 1.21 percent, Panasonic Holdings decreased by 0.56 percent, and Hitachi improved by 1.69 percent.
The outlook from Wall Street was gloomy as major indices initially opened slightly higher on Tuesday but quickly fell into negative territory, ending the session deeply in the red.
The Dow Jones Industrial Average dropped 178.20 points, or 0.42 percent, to close at 42,528.36. The NASDAQ Composite plummeted 375.30 points, or 1.89 percent, finishing at 19,489.68, while the S&P 500 declined 66.35 points, or 1.11 percent, to end at 5,909.03.
The sharp downturn in U.S. stocks was attributed to a significant rise in Treasury yields, with the benchmark 10-year note reaching its highest closing level in eight months. This increase in yields generated concerns about future interest rates, spurred by optimistic U.S. economic data.
The Institute for Supply Management reported higher-than-expected growth in U.S. service sector activity for December, alongside a surge in the prices index to a one-year peak, raising fears of persistent inflation. Similarly, the Labor Department revealed an unexpected rise in U.S. job openings in November.
Oil prices experienced an uptick on Tuesday due to a potential supply shortage after China's decision to forgo imports from Iran and Russia, coupled with unusually cold weather affecting the U.S. West Texas Intermediate Crude futures for February settled at $74.25 a barrel, marking a rise of $0.69 or 0.94 percent.
Closer to home, Japan is set to release December results for its household confidence index later today, with projections indicating an increase to 36.6 from November’s 36.4.
The material has been provided by InstaForex Company -
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