Asia-Pacific markets were down on August 26 despite overnight gains on Wall Street. Remarkably, South Korea became the first major economy to raise interest rates during the pandemic.
The Bank of Korea lifted its base rate to 0.75% for the first time in three years from a record low of 0.5%.
South Korean stocks were mixed. The benchmark Kospi declined 0.58% to 3,128.53 while the Kosdaq increased 0.26% to 1,020.44. Meanwhile, the Korean won dipped versus the U.S. dollar following the rate hike, trading at about 1,168.84.
According to Capital Economics, the virus situation in Korea has worsened since the central bank’s July meeting, when it gave strong signals that tightening was likely.
It also added that the economy has become increasingly resilient to outbreaks, as businesses have learned to live with the virus. Capital Economics also reported that rising household debt and increasing home prices are adding to financial stability issues.
Australia’s ASX 200 declined by 0.54% to settle at 7,491.20 as the coronavirus situation in the country continued to weigh on investor sentiment.
Daily reported COVID-19 infections skyrocketed to more than 1,000 in New South Wales
Furthermore, daily reported COVID-19 infections skyrocketed to more than 1,000 on Thursday in the state of New South Wales alone. Remarkably, it was the first time since the pandemic started that Australia’s daily coronavirus infections exceeded 1,000 cases. Furthermore, two major hospitals in Sydney had to set up emergency outdoor tents to cope with the surge in patients.
Meanwhile, shares of Australia’s flag carrier Qantas increased 3.49%, beating the broader benchmark. The rise came after CEO Alan Joyce announced the airline plans to continue international travel by Christmas.
In Japan, the Nikkei 225 stood at 27,742.29. The Topix index was slightly changed at 1,935.35.
The Hang Seng index in Hong Kong fell 1.32%. The tech-heavy Hang Seng Tech Index declined 2.17% as shares of Alibaba sank 1.4%. Moreover, Meituan dipped nearly 1%, and Apple supplier AAC Tech fell 11%.
Additionally, the Chinese mainland share also witnessed falls. The Shanghai Composite declined 1.09% to settle at 3,501.66. Meanwhile, the Shenzhen component dipped 1.92% to 14,415.46.
Shares in India, Singapore, and Indonesia, struggled for gains in the afternoon. Notably, the Jakarta Composite dropped by around 1%.
U.S. stocks rose again overnight. The Dow Jones Industrial Average surged 39.24 points, which equals 0.1%, to 35,405.50. The S&P 500 gained 0.2% to a new closing peak of 4,496.19. The Nasdaq Composite surged 0.1% to 15,041.86.