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Asian stocks were mixed on Tuesday after Wall Street rallied as investors awaited US earnings reports and an update on economic growth.
Shanghai and Hong Kong retreated while Tokyo advanced. Oil prices were little changed.
Wall Street’s benchmark S&P 500 index rose 0.1% on Monday after Coca-Cola Co. reported better-than-expected quarterly earnings. About 170 of the largest US companies are due to announce earnings this week.
Also this week, US data is expected to show economic growth slowing after rate hikes to cool stubbornly high inflation.
As the economy cools, technology stocks will face a “challenging environment” in which high prices will be sustained, which have helped boost the market, Oanda’s Edward Moya said in a report. He said stocks face “big risks” from corporate profits and a fight in Washington to raise the government’s debt limit.
The Shanghai Composite Index slipped 0.7% to 3,250.79, while Tokyo’s Nikkei 225 rose less than 0.1% to 28,620.07. Hong Kong’s Hang Seng fell 1.9% to 19,578.20.
Seoul’s Kospi tumbled 1.6% to 2,482.50 after South Korea reported stronger-than-expected economic growth in the first quarter and avoided a technical recession. Korean economic activity expanded by 0.3% in the previous three-month period, recovering from a 0.4% contraction.
India’s Sensex opened up 0.2% to 60,175.77. Singapore and Bangkok declined. The New Zealand and Australian markets were closed for a public holiday.
On Wall Street, the S&P 500 rose to 4,137.04 on Monday. The Dow Jones Industrial Average was up 0.2% to 33,875.40, while the Nasdaq Composite was down 0.3% to 12,037.20.
Analysts are expecting companies in the S&P 500 to report the biggest drop in earnings since spring 2020, when the pandemic crippled the economy.
Microsoft will report the results on Tuesday and Amazon on Thursday. Microsoft fell 1.4% and Amazon fell 0.7%.
The majority of companies have beaten forecasts so far this earnings season.
Wall Street is also waiting for the first estimate of how fast the US economy has grown in the first three months of the year. Economists expect growth to slow to 1.9% annually, down from 2.6% in the final quarter of 2022.
Higher interest rates have already slowed US home sales by making mortgages more expensive. Manufacturing and other sectors of the economy also showed pain, while the labor market remained resilient.
The Federal Reserve meets next week. Much of Wall Street expects the Federal Reserve to hike rates at least once more before likely pausing. Many traders are betting that the Fed will have to cut rates later this year to support the economy. But Fed officials have insisted they will keep rates high at least until the end of this year.
In energy markets, US crude, the benchmark in electronic trading on the New York Mercantile Exchange, was up 2 cents to $78.78 a barrel. The contract rose 89 cents on Monday to $78.76. Brent crude, the price basis for international oil trading, was up 2 cents in London to $82.56 a barrel. In the previous session, it rose $1.07 to $82.73.
The dollar fell to 134.21 yen from 134.27 yen on Monday. The euro rose to $1.1051 from $1.1046.
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