Asia markets fall after Dow cracks 22,000; Kospi down 1.7%
Asian indexes closed lower on Thursday after the Dow closed above the 22,000 level and as the dollar staged a slight recovery.
Japan's Nikkei 225 (CBOE: .NKXQ) edged down 0.25 percent, or 50.78 points, to close at 20,029.26.
In Australia, the S&P/ASX 200 (ASX: .AXJO) slid 0.16 percent, or 9.081 points to close above session lows at 5,735.123. The index was driven by weakness in the materials and telecommunication services sub-indexes. The heavily-weighted financials sub-index declined 0.39 percent.
Hong Kong's Hang Seng Index (Hong Kong Stock Exchange: .HSI) edged down 0.28 percent by 3:39 p.m. HK/SIN while mainland markets finished lower. The Shanghai Composite (Shanghai Stock Exchange: .SSEC) slid 0.35 percent, or 11.6480 points, to end at 3,273.4088 and the Shenzhen Composite closed just 0.006 percent below the flat line at 1,869.2124.
Markets in South Korea registered some of the steepest falls in the region, with the Kospi (Korea Stock Exchange: .KS100) finishing the session down 1.68 percent, or 40.78 points, at 2,386.85. The broader Kosdaq index tumbled 2.19 percent to finish at 643.09.
Still, market watchers regarded the fall as a healthy development that the markets had been anticipating.
"You've got to remember that (the) Kospi's been on a tear this year ... So having a 5 percent-type of correction is a healthy correction in a bull market," SEB Head of Asia Strategy Sean Yokota told CNBC's "Street Signs."
The Dow Jones industrial average rose 0.24 percent to close at a record 22,016.24 on Wednesday, breaching the 22,000 level just 107 trading days after the index cleared the 21,000 mark. Apple shares contributed to the gains in the index after the company's stock jumped on the back of better-than-expected earnings .
Markets also digested the release of July ADP numbers in the U.S. The private sector added 178,000 jobs in July, just below analyst expectations of 185,000. The data release came ahead of nonfarm payrolls numbers due at the end of the week.
In Asia, Caixin services PMI released Thursday reflected that July service sector growth in China rose more slowly compared to the month before, Reuters reported. The services PMI figure for July came in at 51.5, a tad below June's 51.6 reading. The figure for July also matched April's reading, which was the lowest seen since May 2016, Reuters added.
"Asian markets had, as a whole, shown strong momentum since the start of the week built on data surprises," said Jingyi Pan, a market strategist at IG.
Having rallied on the back of Apple's surge in the previous session, IT stocks in the region had limited scope for gains Thursday despite the U.S. lead, she added.
Thursday market movers included Rio Tinto (ASX: RIO-AU)'s Australia-listed shares, which closed down 2.49 percent even though the miner reported Wednesday that first-half profit more than doubled on year. Rio Tinto also announced a $1 billion share buyback.
Standard Chartered (London Stock Exchange: STAN-GB) shares listed in Hong Kong were also in the spotlight after the bank reported earnings after the market close on Wednesday. Standard Chartered said pretax profit in the first half rose 93 percent, although the bank announced it would not begin paying dividends. The bank's stock fell 7.56 percent by 3:34 p.m. HK/SIN.
In other corporate news, Toshiba (Tokyo Stock Exchange: 6502.T-JP) announced in a statement that its flash memory unit, Toshiba Memory Corporation, would be unilaterally investing in production equipment after negotiations with SanDisk fell through. The company added it would increase its output ratio of 3D flash memory to 90 percent of its capacity in 2018. Shares of Toshiba closed down 0.77 percent.
On the earnings front, Singapore's CapitaLand (Singapore Exchange: CATL-SG) reported total profit after tax and minority interests for the second-quarter was S$579.3 million ($425.7 million), a 97 percent rise on year. CapitaLand stock was down 0.53 percent by 3:33 p.m. HK/SIN.
Hong Kong's CK Hutchison and Cheung Kong Property Holdings were also among the Asian companies reporting results Thursday.
In foreign exchange, the U.S. currency strengthened slightly after hitting 15-month lows overnight. The dollar index (New York Board of Trade (Futures): =USD), which tracks the dollar against rival currencies, sat at 92.930 at 3:30 p.m. HK/SIN, after falling as low as 92.548 overnight.
The greenback (Exchange: JPY=) softened against the yen, with the U.S. currency last fetching 110.65 yen. Meanwhile, the euro gave up some gains after strengthening against the dollar overnight. The common currency (Exchange: EURBA=) broke above the $1.19 level overnight, the first time it had done so in around two-and-a-half years. The euro last stood at $1.1841.
The British pound (Exchange: GBP=) traded around a 10-month high at $1.3232 ahead of the Bank of England's monetary policy announcement due during European trading hours. The BOE had surprised markets last month when it voted 5-3 in favor of holding interest rates steady at 0.25 percent, with three policymakers voting for a rise in interest rates.
"U.K. data hasn't been great with spending, wages and inflation (weakening) since June, but the insistent hawkishness of U.K. policymakers suggests upgrades to their economic forecasts," BK Asset Management Managing Director of FX Strategy Kathy Lien said in a Thursday note.
Oil prices ceded ground after climbing almost 1 percent overnight. Brent crude slid 0.44 percent to trade at $52.13 a barrel and U.S. crude edged down 0.44 percent to trade at $49.37 a barrel.
Ahead, markets will also await a barrage of U.S. data points, including the Markit composite PMI and ISM non-manufacturing PMI, due later in the day.
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