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Asian shares pull back after US techs knocked off highs

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Syndicated News
Written by Syndicated News

TOKYO, July 28 2017 :  Asian stock markets sagged today after U.S. tech shares retreated from recent rallies, though optimism on U.S. corporate earnings and the global economy underpinned overall sentiment.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4 percent in early trade, with Samsung Electric (005930.KS), Asia’s largest company by market capitalization, dropping 2.0 percent.

Japan’s Nikkei .N225 shed 0.3 percent.

On Wall Street, the Dow industrials set a record closing high, helped by a 7.7 percent jump in Verizon (VZ.N), following the top U.S. wireless carrier’s quarterly earnings.

But investors were spooked by a sudden drop in technology and transportation shares. The S&P 500 technology sector fell 2.0 percent at one point before ending the day down 0.8 percent.

The slide came even as Facebook (FB.O) shares gained 2.9 percent on the social media company’s results, though Amazon.com (AMZN.O) shares fell 3.2 percent after the bell following the e-commerce company’s results.

Yet investors’ sentiment remained solid on the back of upbeat corporate earning results and a bright global economic outlook.

“Given the Dow is hitting a record high, it’s hard to think market sentiment has suddenly changed,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

The S&P 500 index .SPX is on track to post back-to-back, double-digit quarterly earnings growth for the first time in almost six years.

U.S. durable goods orders, published yesterday, surged 6.5 percent last month, the biggest gain in three years.

The bullish report came on the eve of the government’s advance second-quarter gross domestic product estimate today.

Economists expect the data to show growth picking up to 2.6 percent from 1.4 percent in January-March.

A series of Japanese economic data released on Friday came in stronger than expected, with household spending rising more than expected and the jobless rate falling unexpectedly.

MSCI ACWI, a gauge of the world’s 47 stock markets in dollar terms, hit record highs, having gained 2.8 percent so far this month,

If the gains are sustained by month-end it would mark the biggest monthly jump in a year and the ninth consecutive month of increases – the longest such spell since 2003-04.

In the currency market, the dollar regained some footing after slumping to a 13-month low against a basket of major currencies the previous day following the Federal Reserve’s policy statement.

The dollar steadied around 111.21 yen JPY=, a tad above Monday’s low of 110.625, its lowest in more than five weeks.

Oil prices held near eight-week high hit yesterday, supported after key OPEC members pledged to reduce exports and the U.S. government reported a sharp decline in crude inventories.

Brent crude futures fetched $51.51 per barrel, after having climbed to $51.64 yesterday. – Reuters

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Syndicated News

Syndicated News

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