Asian markets mixed as tech earnings crash

SYDNEY: Asian shares traded unevenly on Thursday as mixed earnings from major technology companies unsettled investors, while a sharp decline in Alphabet shares dragged US stock futures lower ahead of results from Amazon and Intel.
Alphabet shares fell 10 per cent in after-hours trading after the company reported heavy spending on artificial intelligence (AI), wiping nearly $400 billion off its market value. Nasdaq futures dropped 0.9 per cent.
Microsoft, however, reported better-than-expected cash flows, lifting its shares by 3 per cent and highlighting the mixed response to the technology sector’s growing investment in AI.
Across Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7 per cent. Japan’s Nikkei fluctuated between gains and losses before rising 1 per cent, while China’s blue-chip index declined 0.8 per cent. Hong Kong’s Hang Seng gained 0.5 per cent.
South Korea’s KOSPI fell 1.2 per cent after Samsung Electronics shares dropped 4 per cent, despite the company reporting record earnings driven by strong demand for memory chips. Investors were disappointed by the lack of details on plans to improve shareholder returns.
Meanwhile, SK Hynix rose 4.6 per cent after announcing plans to return about $75 billion to shareholders this year following record profits.
Market attention also remained on central bank policy. The US Federal Reserve kept interest rates unchanged, as expected, although two committee members voted in favour of a hike.
Fed Chair Kevin Warsh struck a more confident tone on the inflation outlook, helping US Treasury bonds rally. The two-year Treasury yield fell around five basis points to 4.6871 per cent.
Investors are now awaiting US third-quarter gross domestic product figures and September personal consumption expenditures inflation data, the Federal Reserve’s preferred inflation measure.
Markets continue to price in an 80 per cent probability of a US rate increase in December, despite the Fed chair’s comments.
Elsewhere, the Bank of Canada raised interest rates for the first time in more than three years, while the European Central Bank is widely expected to keep rates unchanged later on Thursday.
Oil prices also declined amid renewed hopes for a diplomatic resolution to the Middle East conflict. Brent crude futures fell 1.2 per cent to $113.91 a barrel following reports of efforts to revive peace negotiations involving Iran.
European stock futures edged up 0.2 per cent, pointing to a modestly positive opening.
With major technology earnings and key economic data due, investors remain cautious as they assess the outlook for AI spending, inflation and global interest rates. - Reuters