Equity markets: Asian stocks fall despite Wall St gains after Biden-Xi . talks

TOKYO –

Asian stocks were largely lower on Wednesday, despite a rally on Wall Street after virtual talks between US President Joe Biden and China’s Xi Jinping.

The Japanese benchmark Nikkei 225 fell 0.4% to 29,688.33. The South Korean Kospi fell 1.2% to 2,962.42. The Australian S&P/ASX 200 lost 0.7% to 7,369.90. Hong Kong’s Hang Seng fell 0.4% to 25,621.91 while the Shanghai Composite rose 0.5% to 3,537.32.

The online talks between Biden and Xi at the end of Monday US time appeared to be a step in the right direction, but they have not yielded any major strides toward resolving longstanding disputes over trade and other issues.

“Any concrete development from the meeting has yet to be looked at, but the friendly approach so far in addressing issues from both sides reduces the risks of political tensions in the markets,” said Yeap Jun Rong, market strategist at IG in Singapore.

Shares closed higher on Wall Street after investors reviewed solid earnings reports from major retailers and a surprisingly strong consumer spending report.

The government reported that last month Americans largely shrugged off higher prices and ramped up spending in stores and online. The Commerce Department said retail sales rose 1.7% in October. That is the biggest gain since March and an increase of 0.8% in the previous month.

The S&P 500 index rose 0.4% to 4,700.90 and is just below the record set on Nov. 8. The Dow Jones Industrial Average rose 0.2% to 36,142.22. The Nasdaq rose 0.8% to 15,973.86 points.

Technology stocks did much of the heavy lifting for the benchmark S&P 500, which had slightly more winners than losers. Chipmaker Qualcomm rose 7.9%.

A wide range of businesses that depend on consumer spending posted solid gains. Home Depot was up 5.7% after the home improvement retailer reported rising sales and solid profits in the third quarter amid a hot housing market. The results also increased competitor Lowe’s by 4.2%.

Several businesses that depend on consumer spending rose. Online craft marketplace Etsy was up 5.1%. Nike was up 1.8%, while Coach and Kate Spade, older Tapestry, won 1.5%.

The country’s largest retailer, Walmart, also reported solid financial results and raised its earnings forecast, but its stock fell 2.5%, returning some of the big gains it’s made in recent weeks.

Several other major retailers will release their latest financial results this week. Target reports its results on Wednesday and Macy’s reports results on Thursday.

Healthcare companies also rose. Communications companies and manufacturers of household goods and other consumer goods lagged the market.

Investors received another encouraging economic update from the Federal Reserve, which said industrial production recovered in October with a gain of 1.6%. Earnings followed a 1.3% decline in September.

Wall Street is closely monitoring the latest economic reports for more clues about how businesses and consumers are coping with rising inflation. Companies have increased prices as they face higher raw material costs and supply chain problems. Consumers have been willing to pay the higher prices for many goods, although analysts fear that consumers could eventually fall back on spending due to inflation.

Heightened inflation concerns sent the broader market skyrocketing last week after a strong run that continued for several weeks, with companies mainly reporting solid gains. The latest round of earnings is nearing its end and the market has few special events or economic reports to focus on until the end of the year.

In energy trading, US benchmark oil fell 51 cents to $80.25 a barrel in electronic trading on the New York Mercantile Exchange. It lost 12 cents to $80.76 a barrel Tuesday. Brent oil, the international standard, lost 47 cents to $81.96 a barrel.

In currency trading, the US dollar strengthened from 114.80 yen to 114.85 Japanese yen. It has risen from the 110 yen level since September. The euro fell to $1.1303 from $1.1322.