Asian shares were mixed on Thursday as a tech slump, fired by downbeat earnings forecasts from Facebook parent Meta Platforms, weighed in most corners, while positive bets on China’s markets lifted the mood elsewhere.
A 15% dive in shares of Meta in extended trading after the Instagram owner forecast lighter-than-expected current quarter revenue and higher expenses soured the mood in New York, sparking a sell-off in US tech and tech-related stocks.
Japan’s Nikkei share average fell after a three-session rally, with technology stocks leading the retreat, while investors waited for a Bank of Japan policy decision on Friday for further direction.
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The Nikkei closed 2.16% lower at 37,628.48. It had risen 2.42% on Wednesday in its biggest jump in more than a month, passing the 38,000 level again. The broader Topix fell 1.74% to 2,663.53.
Chip-related shares dragged the Nikkei lower, with Tokyo Electron and Advantest falling 3.48% and 1.71%, respectively. Technology investor SoftBank Group fell 1.96%.
Overnight, the yen fell below 155 per dollar to hit its weakest since June 1990, a level seen as authorities’ line in the sand that heightens the chance of currency intervention.
The market is focusing on whether Bank of Japan Governor Kazuo Ueda will make any hawkish comments on prospects of a near-term interest rate hike at the end of its two-day policy meeting on Friday.
Mainland China and Hong Kong stocks edged higher, however, as market sentiment improved after strategists from global investment houses upgraded their views on Chinese shares.
Earlier this week, UBS analysts forecast foreign investors would gradually return to China’s market via the Stock Connect as market sentiment and the macro environment improve. The bank’s strategists upgraded MSCI China equities to “overweight”.
China’s blue-chip CSI300 index was up 0.25% with, earlier in the session, its financial sector sub-index higher by 0.59%, the consumer staples sector down 0.2%, the real estate index up 1.07% and the healthcare sub-index up 1%.
The Shanghai Composite Index rose 0.27%, or 8.08 points, to 3,052.90, while the Shenzhen Composite Index on China’s second exchange edged up 0.21%, or 3.52 points, to 1,698.34.
Chinese H-shares – stocks belonging to companies from the Chinese mainland – listed in Hong Kong rose 0.47% to 6,129.01, while the Hang Seng Index was up 0.48%, or 83.27 points, at 17,284.54.
Alphabet, Microsoft, Intel Earnings Next
Elsewhere across the region, in earlier trade, Singapore, Seoul, Taipei and Jakarta all fell, while Mumbai was up. The hit to Asian tech stocks took MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.5%.
The listless mood was set to continue in Europe, with Eurostoxx 50 futures down 0.12%, German DAX futures down 0.14% and FTSE futures 0.06% lower.
In an earnings-packed week, tech bellwethers are in the spotlight, with Alphabet, Microsoft and Intel due to report on Thursday.
Tech stocks had been given a boost on Wednesday after Tesla said it would introduce “new models” by early 2025 using its current platforms and production lines.
Beyond corporate earnings, investor focus will be on the first quarter US gross domestic product data on Thursday and personal consumption expenditures, the Fed’s preferred inflation gauge, for March on Friday.
A hotter-than-expected consumer price inflation report for March pushed back expectations of when the Fed will begin cutting interest rates, with markets pricing in a 70% chance of the first cut coming in September, the CME FedWatch Tool showed.
Traders are pricing in 43 basis points of easing in 2024, drastically less than the 150 basis points they anticipated at the start of this year.
The shifting expectations of US rates have lifted Treasury yields and the dollar, casting a shadow on the currency market. Against a basket of currencies, the dollar was little changed at 105.75. The index is up over 4% this year.
US crude rose 0.1% to $82.89 per barrel and Brent was at $88.13, up 0.12% on the day. Spot gold dropped 0.1% to $2,314.45 an ounce.
Key figures
Tokyo – Nikkei 225 < DOWN 2.16% at 37,628.48 (close)
Hong Kong – Hang Seng Index > UP 0.48% at 17,284.54 (close)
Shanghai – Composite > UP 0.27% at 3,052.90 (close)
London – FTSE 100 > UP 0.45% at 8,076.75 (0838 BST)
New York – Dow < DOWN 0.11% at 38,460.92 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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