Asia’s markets endured a mixed Thursday, with profit-takers moving in on some trading floors offsetting big gains on those where traders were playing catch-up after their midweek break.
Wall Street provided another healthy lead after rising for a fourth day – helping pare January’s steep losses – but the positivity was dealt a blow after the close as Facebook parent company Meta’s sobering earnings fuelled fresh worries about the tech sector.
The gloomy mix of a sharper-than-expected drop in profit, a decrease in users and threats to its ad business followed disappointing results from streaming titan Netflix, indicating the pandemic-era sugar rush enjoyed from people being holed up at home has come to an end.
The weak readings provided a reality check that while the world economy is on the mend and many firms such as Apple are enjoying healthy earnings, despite higher inflation and looming interest rate hikes, the coming year is unlikely to be straightforward.
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In Asian trade, Tokyo, Sydney, Manila, Mumbai and Jakarta all fell, having enjoyed a strong week so far. However, Singapore and Seoul were both up around 2% on their first day after the Lunar New Year break.
The benchmark Nikkei 225 index dropped 1.06%, or 292.29 points, to end at 27,241.31 while the broader Topix index closed down 0.86%, or 16.64 points, at 1,919.92.
Wellington, though, was the standout, enjoying more gains as traders cheered news that New Zealand would begin easing its strict border restrictions this month with an aim to fully reopen by October.
Hong Kong, Shanghai and Taipei were still closed as US futures turned sharply lower with Meta plunging about 20% in after-hours trade.
Meanwhile, traders are also still obsessing over the Federal Reserve’s timetable for hiking interest rates, with speculation rife over how much it will raise them in March and how many more times this year.
Several officials have come out in recent days attempting to soothe concerns about a hard and fast approach, though January inflation data released next week will be closely watched for an idea about the central bank’s plans.
US Jobs Data
Private jobs data on Wednesday did little to provide any clarity, with more than 300,000 jobs lost in the sector – against an expected rise of 180,000 – but officials put that down to the impact of Omicron, which saw millions of people infected during the time of the survey.
Still, National Australia Bank’s Rodrigo Catril said a big miss in Friday’s closely watched official figures could affect the Fed’s planning.
“Overall, there is a general sense that this is a temporary setback which arguably could extend into February, making interpretation of the state of the US labour market a difficult task over the near-term,” he said in a note.
Before the upcoming jobs reading, the focus is on Thursday’s meetings of the European Central Bank and Bank of England. While the latter is tipped to unveil another rate hike to help curtail surging prices, the ECB is tipped to remain unmoved.
However, while officials in Frankfurt continue to insist the upward price pressures are temporary, they will be coming under pressure to act after data on Wednesday showed inflation at a record high.
Key figures around 0620 GMT
Tokyo > Nikkei 225: DOWN 1.1% at 27,241.31 (close)
Hong Kong > Hang Seng Index: Closed for a holiday
Shanghai > Composite: Closed for a holiday
New York > Dow: UP 0.6% at 35,629.33 (Wednesday close)
London > FTSE 100: UP 0.6% at 7,583.00 (Wednesday close)
- AFP with additional editing by Sean O’Meara
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