Asia Pacific Shares

Asia – Pacific Shares Weaken Ahead of US Tech Earnings; BOJ Lowers Inflation Expectations

The major Asia-Pacific stock indexes are trading lower on Tuesday despite a bullish session on Wall Street overnight. The S&P 500 and NASDAQ Composite closed at record highs on Monday, fueled by heavyweight growth stocks ahead of a deluge of earnings reports this week.

Overseas traders expressed caution ahead of a U.S. Federal Reserve meeting and a slew of corporate earnings which offset growing optimism about the global economic recovery from the COVID-19 pandemic.

Cash Market Performance

In the cash market, Japan’s Nikkei 225 Index was trading 29077.39, down 48.84 or -0.17% and South Korea’s KOSPI Index is at 3206.14, down 11.39 or -0.35%

In Hong Kong, the Hang Seng Index settled at 28910.50, down 42.33 or -0.15%. In China, the Shanghai Index finished at 2422.52, down 18.65 or -0.54% and Australia’s S&P/ASX 200 Index is trading 7022.70, down 22.90 or -0.33%.

Japanese Shares Fall as Investors Look Past Upbeat Corporate Outlook

Japanese shares inched lower on Tuesday as investors looked past upbeat corporate outlook amid worries about the government’s handling of the COVID-19 pandemic, while chip-related stocks took cues from a positive finish overnight on the NASDAQ.

Japan imposed a third state of emergency on Tokyo and other big cities, but local media have reported many parts of Tokyo are still crowded as people aren’t complying with the order.

Chip-related shares gained, aided by a strong finish for the NASDAQ overnight. Tokyo Electron inched up 0.29%, TDK gained 1.45% and Kyocera rose 0.95%.

“Shares in companies, which reported positive earnings, are not rising. That means investors’ expectations for corporate outlook are too high,” said Takatoshi Itoshima, strategist at Pictet Asset Management.

BOJ Trims Inflation Forecast, Signals Prolonged Easing as COVID Pain Persists

Japan’s central bank maintained its massive stimulus on Tuesday and projected inflation missing its 2% target for years to come, as fresh curbs to combat a spike in COVID-19 cases overshadow the boost to growth from solid global demand, Reuters reported.

As widely expected, the BOJ maintained its short-term interest rate target at -0.1% and that for 10-year bond yields around 0%.

Australia Shares Fall as Banks, Tech Stocks Weigh

Australian shares fell on Tuesday, with losses in technology and financial stocks outweighing gains in the mining sector as iron ore prices and gold prices firmed.

Financial stocks fell 0.44%, led by Zip Co Ltd, down 2.22%, and AMP Ltd, losing 1.75%. Technology stocks fell 0.12%, led by Appen Ltd, down 0.97%, and Afterpay Ltd, losing 0.47%.

South Korea Stocks Slip on Foreign Selloff; Earnings from US Tech Giants, Fed Eyed

South Korean shares slipped on Tuesday despite an upbeat first-quarter GDP data, as foreign investors reduced their positions ahead of earnings from U.S. tech giants and the Federal Reserve policy meeting later this week.

In other news, South Korea’s economic growth beat expectations in the first quarter, extending the country’s export-led recovery as global demand surged and the government maintained support for ailing small businesses.

Finally, foreigners were net sellers of 192.1 billion won ($172.79 million) worth of shares on the main board.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.