Stock market today: Asian benchmarks mostly slide as investors focus on earnings
TOKYO — Asian shares fell largely on Thursday as investors awaited a flurry of global earnings reports, including updates from US technology companies known as the ‘Magnificent Seven’.
Japan’s benchmark Nikkei 225 fell 2.1% to 37,670.50. South Korea’s Kospi fell 1.4% to 2,637.18. Hong Kong’s Hang Seng gained almost 0.1% to 17,215.51, while the Shanghai Composite was virtually unchanged at 3,044.41.
Trading in Australia was closed due to a national holiday, Anzac Day.
Attention also turns to the Bank of Japan, whose two-day monetary policy meeting started on Thursday.
“For the record, ahead of tomorrow’s policy decision, the exceptional weakness of the Japanese yen is the agitated elephant in the room for the BOJ,” Mizuho Bank’s Tan Jing Yi said in a commentary.
In currency trading, the US dollar rose from 155.31 yen to 155.67 Japanese yen. The euro cost $1.0715, compared to $1.0697.
The yen has recently been trading at the 155 yen level, its lowest level in 34 years. That helps Japanese exporters by increasing the value of their overseas earnings, but it also increases the price of imports. Speculation is increasing. Japan could intervene to support the yen.
On Wall Street, the S&P500 was almost flat, rising less than 0.1% to 5,071.63. In the first two days of the week, the price had risen sharply, recouping almost two-thirds of last week’s sharp loss.
The Dow Jones Industrial Average fell 0.1% to 38,460.92, and the Nasdaq composite rose 0.1% to 15,712.75.
Tesla rose 12.1% after saying the night before it would accelerate production of new, more affordable vehicles, which investors hoped would boost growth. The announcement helped investors look beyond the 55% profit drop that Tesla reported.
Tesla is the first of the group of stocks under the Magnificent Seven to report its results for early 2024. The focus is on the small group of stocks because they accounted for most of the gains in the US stock market last year, and they will perform to justify their high prices.
Meta Platforms also reported its latest results after trading ended on Wednesday. Alphabet and Microsoft follow a day later.
The hope is that earnings growth will spread beyond the Magnificent Seven to other types of companies, thanks in large part to a remarkably solid U.S. economy. They will likely need to post bigger gains if they want their stock prices to rise. That’s because they’re unlikely to get much help from the other lever that can boost stock prices: interest rates.
“A strong earnings season seems likely to help restore market confidence,” said Solita Marcelli, Chief Investment Officer Americas at UBS Global Wealth Management.
Orders for machinery, aircraft and other durable goods were stronger than expected last month, according to a report on Wednesday. A recent series of such reports has dashed hopes that the Federal Reserve can make the three rate cuts it previously announced this year.
Boeing lost 2.9% despite results not being as bad as analysts feared. The company, which has faced criticism over the safety of its planes, said it is taking steps to improve production quality, which has slowed production.
Teledyne Technologies plunged 10.9% to one of the market’s biggest losses after the seller of digital image sensors, cameras and other equipment reported weaker-than-expected earnings and revenue. It said demand from the industrial automation and test and measurement markets was weaker than expected.
On the winning side of the market, Hasbro rose 11.9% after the toy and games company reported better earnings and revenue than analysts expected for its latest quarter. It benefited from the growth driven by the Baldur Gate 3 and Magic: The Gathering games, as well as its Peppa Pig content.
Texas Instruments climbed 5.6% after reporting stronger-than-expected earnings and revenue for the latest quarter. Boston Scientific was one of the stronger forces driving the S&P500. It rose 5.7% after beating expectations for earnings and revenue.
In energy trading, U.S. benchmark crude added 14 cents to $82.95 a barrel. Brent crude, the international standard, rose 17 cents to $88.19 a barrel.