HONG KONG – Asian markets struggled Friday to track another record performance on Wall Street as disappointing earnings from tech titans Apple and Amazon took some of the wind out of the sails for investors following a string of positive reports.
Mostly forecast-beating profits from some of the world’s biggest companies have helped fan a rally across global equities this month, helping to temper concerns about surging inflation and the end of the era of central bank largesse.
Investors are also keeping a wary eye on Washington after Joe Biden unveiled a new social and environmental spending package worth $1.75 trillion — half the original cost — that he hopes will appeal to both factions of his Democratic party after months of painful negotiations.
Regional traders were given another strong lead from their counterparts in New York, where the Nasdaq chalked up a record high along with the S&P 500 on continued optimism about the recovery outlook as earnings results suggest firms had largely weathered rising inflation, Covid spikes and supply chain problems.
That — and a drop in new jobless claims to a fresh pandemic-era low — helped overcome data showing the US economy expanded at a weaker pace than expected in the third quarter owing to a slowdown in consumer spending caused by Covid infections.
But broadly downbeat assessments from Apple and Amazon, who both said sales have been hit by supply problems, killed the mood.
Tokyo, Sydney, Seoul, Taipei and Manila were all in the red in morning trade, though Singapore, Wellington and Jakarta eked out gains.
Hong Kong and Shanghai appeared unmoved by a report that China Evergrande had made an overdue interest payment ahead of a Friday deadline, buying it a little more breathing space as it struggles to address a debt crisis that many fear could spill over into the wider economy.
The report comes after the firm stumped up last Friday for another note the day before it was due.
Focus now turns to the Federal Reserve’s policy meeting next week, where it could announce its plans for tapering the vast bond-buying programme put in place at the start of the pandemic and which has been key to an economic and equity surge over the past year and a half.
A long-running spike in inflation has led to calls for policymakers to join other central banks in scaling back the financial support to avoid price rises running out of control and dealing a blow to the world’s top economy.
Officials must then decide on when to hike interest rates — following others including South Korea, Singapore and New Zealand — with a growing consensus now pointing towards mid-2022.
The meeting comes after the European Central Bank on Thursday said it would stick to its own stimulus plan for now, though it added it would draw to a close in March.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.1 percent at 28,792.53 (break)
Hong Kong – Hang Seng Index: DOWN 0.6 percent at 25,416.11
Shanghai – Composite: DOWN 0.2 percent at 5,312.80
Dollar/yen: DOWN at 113.61 from 113.57 yen at 2015 GMT
Pound/dollar: UP at $1.3796 from $1.3792
Euro/dollar: DOWN at $1.1675 from $1.1682
Euro/pound: DOWN at 84.62 pence from 84.69 pence
West Texas Intermediate: FLAT at $82.83 per barrel
Brent North Sea crude: UP 0.4 percent at $84.65 per barrel
New York – Dow: UP 0.7 percent at 35,730.48 (close)
London – FTSE 100: DOWN 0.1 percent at 7,249.47 (close)