Asian stocks have been mostly lower as investors focus on a flurry of global earnings reports, including from US companies known as the “Magnificent Seven.”
TOKYO — Asian stocks were mostly lower on Thursday as investors awaited a flurry of global earnings reports, including updates from the U.S. tech companies known as the “Magnificent Seven.”
Japan's benchmark Nikkei stock average fell 2.1% to 37,670.50. South Korea's Kospi fell 1.4% to 2,637.18. Hong Kong's Hang Seng Index rose nearly 0.1% to 17,215.51, while the Shanghai Composite Index was little changed at 3,044.41.
Trading was closed in Australia due to the national holiday Anzac Day.
All eyes are also on the Bank of Japan, which will hold a two-day monetary policy meeting starting Thursday.
Mizuho Bank's Tan Jing Yi said in a commentary, “The unprecedented depreciation of the yen is a cause for concern for the Bank of Japan as we prepare for tomorrow's policy decisions.''
In currency trading, the dollar rose from 155.31 yen to 155.67 yen. The euro rose to $1.0715 from $1.0697.
The yen exchange rate has recently been hovering around 155 yen, the lowest in 34 years. This helps increase the value of overseas earnings for Japanese exporters, but it also raises the price of imported goods. Speculation is mounting that Japan may intervene to support the yen.
On Wall Street, the S&P 500 index was nearly flat, rising less than 0.1% to 5,071.63. The stock has soared in the first two days of this week, recouping nearly two-thirds of last week's steep decline.
The Dow Jones Industrial Average fell 0.1% to $38,460.92, and the Nasdaq Composite Index rose 0.1% to $15,712.75.
Tesla Inc. jumped 12.1% last night after announcing it would accelerate production of new, more affordable cars, which investors hope will lead to faster growth. The announcement helped investors avoid Tesla's reported 55% profit decline.
Tesla is the first of the Magnificent Seven to announce its financial results for early 2024. With Tesla driving much of the U.S. stock market's rise last year, the focus is on smaller stocks. Performing to justify a high price.
Metaplatforms also reported updated financial results after the close of trading on Wednesday. Alphabet and Microsoft plan to follow suit one day later.
Earnings growth is expected to extend beyond the Magnificent Seven to other types of companies, largely because the U.S. economy is so strong. If you want the stock price to rise, it's probably going to need to deliver higher returns. That's because interest rates, another means of pushing up stock prices, aren't likely to provide much help.
“A strong earnings season is likely to help restore market confidence,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.
A report on Wednesday said orders for machinery, aircraft and other long-term products were stronger than expected last month. A spate of recent reports has dashed hopes that the Federal Reserve might cut interest rates three times this year, as it had previously indicated.
Boeing fell 2.9% despite reporting financial results that weren't as bad as analysts had feared. The company, which is battling criticism over the safety of its planes, said it was taking steps to improve manufacturing quality, which has held up production.
Teledyne Technologies fell 10.9%, the market's biggest loss, after the maker of digital image sensors, cameras and other equipment reported lower-than-expected profits and revenue. It said demand from the industrial automation and test and measurement markets was weaker than expected.
Among market winners, Hasbro rose 11.9% after the toy and game company reported better-than-expected earnings and revenue for its latest quarter. It benefited from growth from Baldur Gate 3 and Magic: The Gathering games, as well as Peppa Pig content.
Texas Instruments rose 5.6% after reporting better-than-expected profits and sales for the latest quarter. Boston Scientific was another powerful force pushing up the S&P 500 index, rising 5.7% after beating earnings and revenue expectations.
In energy trading, benchmark U.S. crude oil added 14 cents to $82.95 a barrel. Brent crude, the international standard crude, rose 17 cents to $88.19 a barrel.
