By Gregor Stuart Hunter
SINGAPORE (Reuters) -Asian stocks fell for a second day on Thursday as lacklustre earnings reports from tech megacap stocks deepened a selloff on Wall Street, while U.S. sanctions against Russia and China revived fears around geopolitics. Oil prices surged.
MSCI’s broadest index of Asia-Pacific shares outside Japan was last off 0.3%, while Japan’s Nikkei 225 sank 1.5%.
Chinese stocks declined 0.4% in Hong Kong after Reuters reported the White House is considering a plan to curb an array of software-powered exports to China to retaliate against Beijing’s latest round of rare earth export restrictions.
“With no fresh macro data to anchor sentiment, investors are leaning defensive while Trump’s Asia visit stirs geopolitical nerves,” said Charu Chanana, chief investment strategist at Saxo Bank in Singapore. “The chatter around U.S. software export curbs to China has hit tech sentiment right where it hurts, and renewed sanctions on Russia are a reminder that geopolitical risks aren’t going away either.”
Global equity markets are easing off record highs as corporate earnings season kicks off. While results or outlooks from the megacaps have disappointed investors, most of the companies that have reported so far have beaten analysts’ estimates.
South Korean stocks fell 0.2% after the Bank of Korea kept rates on hold, as expected by analysts polled by Reuters.
Brent crude was last up 2.3% at $64 per barrel after U.S. President Donald Trump on Wednesday imposed Ukraine-related sanctions for the first time in his second term, targeting Russian oil companies Lukoil and Rosneft. The move came the same day as EU countries approved a 19th package of sanctions on Moscow that included a ban on Russian liquefied natural gas imports.
U.S. crude oil, gasoline and distillate inventories fell last week as refining activity and demand strengthened, the Energy Information Administration said on Wednesday.
S&P 500 e-mini futures edged up 0.1% after a second day of declines for U.S. stocks overnight as earnings reports from tech megacaps underwhelmed analysts on Wall Street.
Netflix shares fell more than 10% on Wednesday as the streaming giant’s outlook for the coming quarter left investors nonplussed.
Tesla shares fell 3.8% in after-hours trading after reporting profit that failed to live up to analysts’ expectations, despite record third-quarter revenue that beat estimates.
Apple shares fell 1.6% after the tech giant was hit with a complaint to EU antitrust regulators by two civil rights groups on Wednesday over the terms and conditions of its App Store and devices for allegedly breaching landmark rules aimed at reining in Big Tech.
The yield on the U.S. 10-year Treasury bond was last steady at 3.955%, up 0.2 basis point compared with a previous close of 3.953%.
Investors believe further policy easing from the Federal Reserve is a near-certainty. Fed funds futures imply a 96.7% probability of a 25-basis points cut to interest rates at the U.S. central bank’s meeting on October 29, compared with a 98.3% chance on Wednesday, according to the CME Group’s FedWatch tool.
The U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was last trading 0.1% firmer at 99.03.
Gold was last down 0.6% at $4,071.09 per ounce, with prices closing in on the $4,000 mark in early Asian trading as investors booked profits ahead of U.S. inflation data due this week.
(Reporting by Gregor Stuart Hunter; Editing by Sonali Paul)
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