Indian stock markets continued their downward spiral on May 9, extending losses for the fourth consecutive session. The benchmark Sensex and Nifty indices opened marginally lower and declined further throughout the day. The market’s weakness has been attributed to the ongoing Lok Sabha elections and geopolitical uncertainties. Top gainers in today’s session included automobile companies, while oil and gas and construction sectors faced significant losses.
Asian markets exhibited a mixed performance on Thursday, with some key indices experiencing declines ahead of the release of a deluge of global earnings reports, including updates from prominent U.S. tech companies known as the ‘Magnificent Seven’. Japan’s benchmark Nikkei 225 suffered a 2.1% drop to 37,670.50, while South Korea’s Kospi lost 1.4% to 2,637.18. Hong Kong’s Hang Seng index managed a modest gain of nearly 0.1% to 17,215.51, but Shanghai’s Composite remained largely unchanged at 3,044.41. Meanwhile, markets in Australia and New Zealand were shuttered due to Anzac Day.
Attention is also directed towards the Bank of Japan, which commenced its two-day monetary policy meeting on Thursday. Market analysts have noted the remarkable weakness of the Japanese yen as a concern for the BOJ. The U.S. dollar strengthened against the yen, rising to 155.67 yen from 155.31 yen. The euro also gained ground, increasing to $1.0715 from $1.0697. The yen has been trading at 155 yen-levels recently, its lowest point in 34 years. This situation benefits Japanese exporters but simultaneously drives up the cost of imports, leading to speculation that Japan may intervene to bolster the yen.
In the United States, the S&P 500 index remained essentially flat, edging up by less than 0.1% to 5,071.63. The Dow Jones Industrial Average slipped marginally by 0.1% to 38,460.92, while the Nasdaq composite gained 0.1% to reach 15,712.75. Tesla’s stock surged by 12.1% after the company announced plans to accelerate production of more affordable vehicles, a move that investors hope will reignite growth. This announcement helped mitigate concerns over Tesla’s reported 55% decline in profit. Tesla is the first of the ‘Magnificent Seven’ group to release its financial results for the start of 2024.
The focus on this small group of stocks stems from their significant contribution to the U.S.’s market gains in the previous year. Their continued strong performance is crucial to justifying their high valuations. Meta Platforms also disclosed its latest results following the close of trading on Wednesday, with Alphabet and Microsoft scheduled to follow suit a day later. Market expectations are that profit growth will extend beyond the ‘Magnificent Seven’ to a wider range of companies, largely driven by the resilience of the U.S. economy. However, to drive stock prices higher, these companies will likely need to deliver even more robust profit growth, as interest rates are unlikely to provide significant support.
Despite posting results that exceeded analysts’ expectations, Boeing’s stock price declined by 2.9%. The company, which has faced criticism regarding the safety of its aircraft, stated it is implementing measures to enhance manufacturing quality, albeit this has slowed down production. On the other hand, Hasbro’s stock soared by 11.9% after the toy and game company surpassed analysts’ expectations for profit and revenue in the latest quarter. Texas Instruments and Boston Scientific also contributed to the positive sentiment in the S&P 500 index, rising by 5.6% and 5.7%, respectively, after exceeding forecasts for profit and revenue.
Asian markets are facing uncertainty due to the depreciation of currencies against the U.S. dollar. The Bank of Japan’s two-day policy meeting, South Korea’s GDP data, Malaysian inflation figures, and trade figures from Vietnam and Hong Kong will be key market movers. Concerns about the weakening yen could prompt intervention by the Japanese authorities. Indonesia’s recent rate hike has also raised eyebrows. Meanwhile, geopolitical tensions between the United States and China persist, with the U.S. Senate voting to potentially ban TikTok.
Asian markets are expected to open higher on Wednesday, tracking positive cues from Wall Street and other global markets. Investors are continuing to pour money into risky assets, boosting sentiment across the region. Key events on the economic calendar include interest rate announcements from Indonesia, trade data from Thailand and New Zealand, inflation figures from Japan and Australia, and a Bank of Japan policy meeting. The Japanese yen has remained relatively stable, with intervention from authorities yet to materialize. China’s yuan, on the other hand, continues to weaken against the dollar. Overall, the general outlook for Asian markets is positive, driven by improved global market conditions, strong earnings reports in the U.S., and a weaker dollar.
Asian markets are expected to open on a positive note on Wednesday as investors continue to favor risky assets. The main highlights of the day include Indonesia’s interest rate decision, Thailand and New Zealand’s trade figures, Japan’s service sector producer inflation data, and Australia’s consumer price inflation. While Japanese authorities have not yet intervened in the currency market, traders remain vigilant as the dollar approaches 155.00 yen. The Chinese yuan has also weakened, reaching a five-month low against the dollar. Indonesia’s central bank is widely expected to keep its interest rates unchanged, with a slight chance of a small hike. The overall sentiment across Asian markets is expected to be positive, driven by strong performances in global markets, lower bond yields, and a weaker dollar.
U.S. stocks traded higher towards the end of trading on Tuesday, with the S&P 500 gaining more than 1%, while the Dow and NASDAQ also rose. General Motors Company reported better-than-expected earnings for its fiscal first quarter, with quarterly sales growth of 7.6% year-on-year. Communication services and materials sectors were the leading and lagging sectors, respectively. In commodity news, oil traded up 1.8% while gold traded down 0.2%. European and Asian markets closed mostly higher, with the eurozone’s STOXX 600 rising 1.09% and Japan’s Nikkei 225 gaining 0.30%. Sales of new single-family houses jumped 8.8% in March, while the S&P Global services PMI and composite PMI fell to 50.9 and 50.9, respectively.
Asian stock markets predominantly advanced on Tuesday, following a rebound in US equities. Japan’s Nikkei 225 witnessed a modest gain of 0.3%, while the Hang Seng in Hong Kong surged 1.6%. However, the Shanghai Composite index in China slipped 0.8%. US futures contracts exhibited a mixed performance, and oil prices escalated. The S&P 500 index regained more than a quarter of its recent losses on Monday, as technology stocks led the recovery. The Dow Jones Industrial Average and Nasdaq composite also advanced. This week marks a crucial period for earnings reports, with numerous companies in the S&P 500 set to release their financial results. Elevated inflation and concerns about interest rate hikes continue to impact market sentiments.
Asian shares advanced on Tuesday, tracking gains on Wall Street as investors turned their attention to upcoming earnings reports from US tech giants. The MSCI index of Asia-Pacific shares outside Japan rose 0.5%, buoyed by a surge in Taiwanese and Hong Kong stocks. Tech shares in the region performed well, while Chinese shares fell. The Japanese yen continued its decline, hitting fresh 34-year lows against the US dollar amid a diverging monetary policy outlook between the US and Europe. Oil prices recovered slightly, while gold prices declined.
