Lackluster trading in Asia contrasted with Wall Street gains that propelled US tech stocks into a bull market amid bets that a peak in interest rates is near and the banking turmoil will ease further.
A benchmark for Asian equities fell about 0.5%, with slightly larger declines for Japanese and Chinese indices, while Australian and South Korean markets made gains.
An initial push at Hong Kong-listed tech companies fizzled out as a rally in Alibaba Group Holding evaporated. CEO Daniel Zhang said the company will gradually think about it relinquish control some of its main businesses. Its brief Thursday briefing came after an overhaul announced earlier in the week that sparked a 12 percent rally in the stock on Wednesday.
Contracts for the S&P 500 were down about 0.1% after the index rose 1.4% on Wednesday. Those for the Nasdaq 100 fell 0.2% after the gauge rose 1.9%, cementing its 20% recovery from a December low.
The tech-heavy index, which includes Apple, Microsoft and Amazon.com, closed at its highest level since August in a sign investors are bracing for the Federal Reserve to end its cycle of rate hikes and possibly closing later this year to a looser policy.
Treasury bonds remained flat across the curve, extending muted action on Wednesday as the 10-year benchmark traded the smallest range in more than a month. Australian and New Zealand government bond yields were modestly higher.
The dollar edged higher Thursday in Asia after strengthening as investors digested recent comments from Fed officials and looked ahead to PCE core data for clues on the Fed’s next move. Investors now expect US rates to be around 4.3% by the end of the year, around 70 basis points below current levels.
“The Fed remains in a very difficult position,” Wolfe Research’s Chris Senyek wrote in a note. “With banks stabilizing, inflation still well above target, the labor market still historically strong and the Fed in dire need of restoring credibility, we expect FOMC to rise 25 basis points on May 3rd .”
A busy day of Chinese revenue includes Agricultural Bank of China, Industrial & Commercial Bank of China, Bank of China, Bank of Communications, Air China, Country Garden Holdings, Citic Securities and Great Wall Motor.
“Analysts are revising earnings higher,” said Audrey Goh, senior cross-asset strategist at Standard Chartered Wealth Management, in a speech on Chinese equities on Bloomberg Television. “Consumption, fixed asset investment and even the distressed real estate sector are showing early signs of life and recovery.”
Elsewhere in markets, oil posted its first drop in three sessions as falling US diesel demand overshadowed a disruption in supplies from Turkey. Gold fell for a second day and Bitcoin hovered above $28,000. BM/DM
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