Investing.com - APAC shares opened mixed on Wednesday after US stocks gained as worries about an impending recession slightly receded.
The S&P/ASX 200 and Nikkei 225 both eased 0.1% lower after the first 30 minutes of trading, while the KOSPI 200 added 1.2%.
In the US, a rebound in stocks left investors dealing with volatile market swings. The S&P 500 rose 1%, with gains across all 11 sectors. The Dow Jones Industrial Average added 0.8%, or about 294 points, and the tech-heavy NASDAQ Composite increased by 1%. The market appeared to stabilize as stocks across various sectors rallied. Wall Street's "fear gauge," the CBOE Volatility Index, dropped 28%, marking its biggest decline since 2010.
Despite Tuesday's gains, major indexes remained in negative territory for the week after suffering worst days since September 2022 on Monday. The gains followed a partial recovery in Japan, where the Nikkei 225 rallied 10%, a day after it plunged 12% in its worst day since 1987's Black Monday in the US.
The popularity of a Wall Street bet called the carry trade had far-reaching consequences following the Bank of Japan's interest rate hike. For years, Japan's ultralow rates lured investors to borrow yen to buy riskier assets like US stocks. However, a strengthening yen forced these investors to buy more of the currency, pushing it higher and prompting more margin calls.
Meanwhile, big tech stocks that have driven the US market to new heights are under scrutiny. Some investors believe their prices may be disconnected from their profits. Warren Buffett's Berkshire Hathaway Inc (NYSE:BRKa) disclosed it had sold nearly half of its massive Apple Inc (NASDAQ:AAPL) stake in the second quarter, affecting market sentiment.
On Tuesday, NVIDIA Corporation (NASDAQ:NVDA) and Meta Platforms Inc (NASDAQ:META) both rallied around 4%, while Apple fell by 1%. On Monday, each member of the "Magnificent Seven" technology stocks fell by at least 2.5%.
In the bond markets, the yield on the 10-year US Treasury note rose to 3.887% from 3.783% on Monday, breaking a streak of falling yields.
Oil prices gained, ending a three-session losing streak. Global benchmark Brent crude rose 0.2% to $76.48 a barrel, while gold fell 0.8% to $2,390.82.
Earnings reports influenced individual stock movements. Caterpillar Inc (NYSE:CAT) shares gained 3% after exceeding profit expectations. Uber Technologies Inc (NYSE:UBER) shares jumped 11% following higher-than-expected earnings. Shares of WK Kellogg Co (NYSE:KLG) dropped 7% after reporting lower-than-anticipated profits.
Chinese shares rose after a volatile morning as markets corrected after Monday's selloff. The Shanghai Composite Index ended 0.2% higher at 2,867.28, the Shenzhen Composite Index rose 1.2%, and the ChiNext Price Index gained 1.25%. Consumer services and property sectors led the gains, with Offcn Education Technology up 9.95% and Poly Developments & Holdings adding 3.9%. Insurance stocks led the losses, with China Life Insurance down 6.1%.
Hong Kong's Hang Seng Index fell 0.3% to 16,647.34 for a fourth consecutive session. Insurers were the biggest losers, with China Pacific Insurance slumping 10%, China Life Insurance down 4.5%, and AIA Group falling 2.4%. Gainers included WuXi AppTec (up 6.2%) and WuXi Biologics (HK:2269) (up 3.1%). The Hang Seng Tech Index edged 0.1% higher to 3,342.52.
Japan's Nikkei Stock Average surged 10% to 34,675.46, its biggest daily percentage gain since October 2008, recovering after Monday's 12% drop. Electronics and heavy-industry stocks led the gains, with Tokyo Electron climbing 17% and Hitachi Ltd. surging 17%. The 10-year Japanese government bond yield rose 13 basis points to 0.885%.
India's Sensex fell 0.2% to close at 78,593.07, reversing earlier gains. Financial stocks led the decline, with State Bank of India falling 1.3%, HDFC Bank losing 0.75%, and IndusInd Bank down 0.7%. JSW Steel rose 2.3%, while Tech Mahindra and Larsen & Toubro each gained 1.6%.
UK stocks rose, with the FTSE 100 Index increasing 0.2% to 8,026.69. Keller Group PLC was the biggest gainer, surging 12%, followed by Raspberry Pi Holdings PLC (up 11%) and Melrose Industries PLC (up 6.6%). Domino's Pizza Group PLC posted the largest decline, dropping 7.1%, followed by Rightmove PLC (down 4.3%) and Endeavour Mining PLC (down 4.0%).
Elsewhere in Europe, markets closed mixed. The STOXX Europe 600 Index rose 0.3% to 488.44, Germany's DAX gained 0.1% to 17,354.32, while France's CAC 40 fell 0.3% to 7,130.04.