(Bloomberg) — Stocks in Asia slid following a sluggish US session, with investors seeking firm evidence of an earnings recovery before taking this month’s rally further.
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Japanese equities underperformed the region, as Nintendo tumbled on weak outlook and investors awaited Toyota Motor’s earnings due later today. Benchmarks in mainland China opened lower, taking a breather after a recent rally. Hong Kong shares gained as investors looked ahead to a slew of major tech earnings next week.
Asian currencies were mostly weaker against the dollar. The yen slipped, as US calls for caution on intervention added to expectations that the currency will face continued pressure. Finance Minister Shunichi Suzuki said the government stands ready to take all possible measures as needed.
“There was limited data on corporate earnings to worry the markets, with no unexpected surprises and a lack of major US economic data in the days ahead,” said Kyle Rodda, a senior market analyst at Capital.com. “Debate continues within markets and among policymakers about the appropriate level for interest rates.”
Treasury 10-year yields were steady after falling on solid demand in a sale of three-year notes. Federal Reserve Bank of Minneapolis President Neel Kashkari said Tuesday it’s likely the central bank will keep rates where they are “for an extended period of time” until officials are certain prices are on track to their target.
In Asia, the focus will be on President Xi Jinping’s trip to Europe and how trade relations will develop from here. In another sign of geopolitical tensions between China and the West, the US has revoked licenses allowing Huawei Technologies Co. to buy semiconductors from Qualcomm Inc. and Intel Corp., according to people familiar with the matter.
Contracts for US stocks were little changed in Asia trading after the S&P 500 eked out a fourth session of advance. Stocks across the world have been trying to make a comeback after April’s rout, with gains fueled by prospects of Fed rate cuts and solid earnings.
“We continue to see a path higher for stock prices as long as fundamental conditions remain stable and profit growth remains on a positive trend,” said Anthony Saglimbene at Ameriprise. “Elevated interest rates and sticky inflation, along with the Fed holding monetary policy at restrictive levels for longer than most expected at the start of the year, introduce some added risks.”
In the corporate world, KKR & Co. will buy the wealth management and corporate trust units of Australian fund manager Perpetual Ltd. for A$2.175 billion ($1.43 billion), ending a months-long sale process. In South Korea, HD Hyundai Marine Solution Co. jumped as much as 45% in its trading debut after an initial public offering that was priced at the top of a range.
Elsewhere, oil was little changed as traders tracked tensions in the Middle East and a mildly bearish US stockpiles report.
Key events this week:
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Toyota earnings, Wednesday
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Germany industrial production, Wednesday
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Fed Governor Lisa Cook speaks, Wednesday
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Bank of Japan issues summary of opinions from April policy meeting, Thursday
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China trade, Thursday
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UK BOE rate decision, Thursday
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US initial jobless claims, Thursday
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UK industrial production, GDP, Friday
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ECB publishes account of April policy meeting, Friday
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BOE Chief Economist Huw Pill speaks, Friday
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US University of Michigan consumer sentiment, Friday
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Chicago Fed President Austan Goolsbee speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 10:50 a.m. Tokyo time
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Nikkei 225 futures (OSE) fell 1.1%
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Japan’s Topix fell 0.9%
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Australia’s S&P/ASX 200 was little changed
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Hong Kong’s Hang Seng rose 0.7%
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The Shanghai Composite was little changed
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Euro Stoxx 50 futures were little changed
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Nasdaq 100 futures were little changed
Currencies
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The Bloomberg Dollar Spot Index rose 0.2%
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The euro fell 0.1% to $1.0744
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The Japanese yen fell 0.3% to 155.11 per dollar
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The offshore yuan was little changed at 7.2282 per dollar
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The Australian dollar fell 0.3% to $0.6575
Cryptocurrencies
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Bitcoin fell 0.6% to $62,602.89
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Ether fell 0.6% to $3,028.63
Bonds
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The yield on 10-year Treasuries was little changed at 4.46%
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Japan’s 10-year yield declined 1.5 basis points to 0.855%
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Australia’s 10-year yield declined five basis points to 4.26%
Commodities
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West Texas Intermediate crude fell 0.4% to $78.09 a barrel
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Spot gold fell 0.2% to $2,309.90 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rita Nazareth.
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