Asia stocks mixed as profit-taking, tech woes offset catch-up play

Asia stocks mixed as profit-taking, tech woes offset catch-up play

By

HONG KONG: Asian markets were mixed on Thursday, with a split between markets that saw profit-taking after a recent rally and markets that are catching up after much of the region’s mid-week break.

Wall Street provided another healthy lead after a fourth straight day of gains — helping pare a huge loss in January — but as Facebook parent Meta’s sobering earnings sparked fresh concerns about the tech sector, That positivity took a hit after the close.

After disappointing results from streaming giant Netflix, a pessimistic combination of a bigger-than-expected profit drop, fewer subscribers and a threatened advertising business signaled the end of the pandemic-era sugar rush that people were enjoying at home.

The weak data provided a reality check that while the world economy is improving and many companies such as Apple are in good earnings — despite rising inflation and looming interest rate hikes — the coming year is unlikely to be smooth sailing.

In early Asian trade, Tokyo, Sydney, Wellington, Manila and Jakarta were all down and have been very strong so far. However, both Singapore and Seoul rose about 2% on the first day after the Lunar New Year holiday.

Hong Kong, Shanghai and Taipei remain closed. U.S. futures fell sharply, with Meta plummeting about 20% in after-hours trading.

Meanwhile, traders are still keeping an eye on the Fed’s rate hike schedule, amid widespread speculation about how much the central bank will raise rates in March and how many more this year.

Several officials have come out in recent days to assuage fears of tough action, though next week’s January inflation data will be closely watched for thoughts on the central bank’s plans.

Private employment data on Wednesday offered little clarity, with the industry losing more than 300,000 jobs – compared with an expected gain of 180,000 – but officials attributed it to the impact of Omicron, when millions of people were infected. investigation.

Still, National Australia Bank’s Rodrigo Catriller said a major misstep in official data closely watched on Friday could affect the Fed’s plans.

“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.

“Forecasts for Friday’s payrolls are now all over the place with many calling for a negative print in January.

“Depending on the magnitude of the disruption, this can potentially become a solid excuse for the Fed to wait on the sidelines after a first rate hike in March,” he added.

“A theme to watch, but for now this is yet another reason to push back on the notion of more than four rate hikes this year.”

Before the upcoming jobs reading, 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 Wednesday showed inflation at a record high.

You may also like