Asian stocks headed for their lowest close in a month, hit by renewed concerns about a global banking crisis. Robust earnings from Microsoft Corp. and Alphabet Inc. buoyed US futures.
(Bloomberg) — Asian stocks headed for their lowest close in a month, hit by renewed concerns about a global banking crisis. Robust earnings from Microsoft Corp. and Alphabet Inc. buoyed US futures.
An Asia share gauge fell for the fourth session in a row Wednesday, with financial stocks among the biggest losers. Iron-ore miners and steelmakers also slipped as iron ore earlier dropped below $100 a ton for the first time since December, a signal of a frail recovery for China’s commodities demand.
A selloff in Chinese stocks showed signs of easing as focus shifted toward potential fresh policy support from Beijing. The benchmark CSI 300 Index shed 0.2% before the lunch break, while the MSCI gauge of Chinese shares climbed 0.6% after a six-day loss.
Sentiment was better in South Korea after battery maker LG Energy Solution Ltd. posted first-quarter net income that beat analysts’ estimates and Apple Inc.-supplier SK Hynix Inc. forecast a rebound in the memory-chip sector later this year.
US futures recovered from Tuesday’s losses following better-than-expected earnings from Microsoft and Alphabet after markets closed in New York. The S&P 500 had slid 1.6% Tuesday and the Nasdaq 100 ended 1.9% lower.
First Republic Bank’s disappointing earnings rekindled fears over the health of the US banking sector. The bank is exploring an asset sale of up to $100 billion of long-dated mortgages and securities as part of a rescue plan, Bloomberg reported Tuesday.
“The markets are very much focused on some of the earning story, but possibly overlooking the weight of economic deceleration that is playing through right now, particularly in the United States,” John Woods, Asia Pacific chief investment officer at Credit Suisse Group AG, said on Bloomberg TV. “I’m looking at a whole range of technical signals which seem to be suggesting a risk-off environment.”
Treasuries were little changed in Asia after the benchmark 10-year yield fell nine basis points Tuesday and the policy-sensitive two-year yield dropped 13 basis points.
Australia’s bonds rallied and the Aussie weakened after a government report showed core inflation slowed in March. New Zealand debt also advanced.
The dollar steadied after rallying Tuesday when investors bought the currency as a haven.
A lot of the current expectations around earnings are too positive, considering the US still has some way to go to contain inflation, according to Yuting Shao, a macro strategist at State Street Global Markets in Hong Kong.
“We’re just not there yet,” she said on Bloomberg Television. “We really continue to expect more, basically in terms of guidance, to become a little bit more negative and some downgrades coming as well.”
Oil ticked slightly higher amid demand concerns that may drive refineries to cut throughput. Gold was little changed.
Key events this week:
- Sweden rate decision, Wednesday
- Eurozone economic, consumer confidence, Thursday
- US initial jobless claims, GDP, Thursday
- Bank of Japan meets on interest rates, Friday
- Euro-area GDP, Friday
- US personal income, Friday
Earnings highlights:
- Wednesday: Boeing, Meta, Hilton
- Thursday: Amazon, American Airlines, Intel, Mastercard, Southwest Airlines, Hershey, Honeywell, Barclays
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.4% as of 1:02 p.m. Tokyo time. The S&P 500 fell 1.6%
- Nasdaq 100 futures rose 1.3%. The Nasdaq 100 fell 1.9%
- Japan’s Topix index fell 1.2%
- Hong Kong’s Hang Seng Index rose 0.6%
- China’s Shanghai Composite Index fell 0.3%
- Australia’s S&P/ASX 200 index fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0975
- The Japanese yen rose 0.2% to 133.53 per dollar
- The offshore yuan rose 0.1% to 6.9346 per dollar
- The Australian dollar fell 0.3% to $0.6606
Cryptocurrencies
- Bitcoin rose 1.2% to $28,314.56
- Ether rose 0.2% to $1,864.84
Bonds
- The yield on 10-year Treasuries was little changed at 3.40%
- Japan’s 10-year yield declined 1.5 basis points to 0.46%
- Australia’s 10-year yield declined 15 basis points to 3.29%
Commodities
- West Texas Intermediate crude rose 0.5% to $77.46 a barrel
- Spot gold fell 0.1% to $1,995.02 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.