Asian markets pull back after weak earnings in U.S.
A couple enters a shopping complex in the Omotesando district of Tokyo.
Stock markets across Asia were broadly down early Friday, tracking overnight weakness in Europe and the U.S. amid disappointing earnings reports.
In Japan, stocks were hit by 0.5% gain in the yen against the U.S. dollar over the last day, making the country’s exports less competitive. The Nikkei Stock AverageNIK, -0.55% was last down 0.6%, reducing the likelihood that the index could breach the psychological 20,000-point level during the session.
Elsewhere, Korea’s Kospi SEU, -0.39% was off 0.4%, while Australia’s S&P/ASX 200XJO, -0.84% declined 0.7%. In China, the Shanghai Composite IndexSHCOMP, +0.39% was up 0.1%, while Hong Kong’s Hang Seng Index HSI, +0.08% was flat.
“At the margins it’s similar to what we saw in the U.S., there is a slightly risk-off feel to this market,” said Chris Weston, chief market strategist at IG Markets in Australia.
Weston said sentiment was favoring less discretionary stocks in the market, although commodities in Australia continue to find some support. Among those, Rio Tinto RIO, +0.54% was last up 0.6%.
Overnight, U.S. stock indexes pulled back slightly, with the Dow Jones Industrial Average ending down 0.1%, as individual stocks sold off following disappointing corporate earnings reports. Shares of department store leader Macy’s M, -17.01% shed 17% after the firm reported a bigger-than-expected slide in first-quarter revenue.
Analysts, however, still see some potential for gains in Asia, which has seen India and South Korea logging fresh record highs and Japan, Hong Kong, Indonesia and Taiwan posting multiyear highs.
“We keep on making new records and as long as we continue to have hot money I don’t think it’s going to be cut off any time soon,” said Stuart Ive, private client manager at OM Financial in Wellington, New Zealand.
“We might have some corrections to the downside but any pullbacks we’ve seen so far have been very, very shallow,” Ive noted.
In the forex market, the New Zealand dollar was one of the biggest movers after the country’s central bank surprised the markets by retaining a neutral bias, which pushed the currency down 1.5% against the U.S. dollar over the past day.
In commodities, oil futures edged higher in early Asian trading after a 1% gain overnight. The move, according to ANZ Bank ANZ, -0.78% , was due to expectations of more — and possibly deeper — cuts by the Organization of the Petroleum Exporting Countries. The cartel said Thursday its production dropped in April, a sign that members were curbing output as agreed.
Source: by LUCY CRAYMER/MarketWatch
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