Asian markets tumble after disappointing US earnings

26 Jul, 2019

Tesla and American Airlines both suffered bruising declines after posting quarterly results, while Amazon reported a slowdown in earnings growth as it ramped up one-day delivery operations.

American stocks had been bolstered in recent weeks by expectations that the Federal Reserve will cut interest rates next week.

But strong American economic data, including Thursday's report showing an increase in durable goods sales in June, has investors fearing a less dovish Fed announcement.

"Markets are getting nervous that Fed could disappoint next week," said OANDA senior market analyst Edward Moya.

Recent data also showed that Washington's long-running trade war with Beijing was "not having a terrible impact" on the American economy, he added, tempering hopes of a sizeable rate cut.

Tokyo was down 0.5 percent at the break as investors went into profit-taking mode ahead of the weekend.

Japan's SoftBank Group was down 0.1 percent after it announced a new $108-billion fund to drive investment in artificial intelligence.

Beleaguered automaker Nissan was off 2.6 percent after announcing a 95-percent plunge in quarterly net profit and the shedding of 12,500 jobs on Thursday.

Chip-testing equipment maker Advantest slipped after a 20.2-percent surge Thursday on better-than-expected quarterly earnings.

Hong Kong fell by 0.5 percent and Shanghai dropped 0.2 percent while Taiwan and Singapore were both down.

Sydney pared Thursday's gains on the back of central bank chief Philip Lowe hinting at further rate cuts, after Australia's competition watchdog called for measures to better police internet giants Google and Facebook.

- Euro in flux -

On currency markets, the euro hit two-year lows before rallying Thursday after the European Central Bank signalled it could soon undertake new stimulus measures and cut rates to boost flagging growth and inflation in Europe.

Bank chief Mario Draghi's statement had put a drag on European stocks, said National Australia Bank's Rodrigo Catril.

"The lack of detail alongside a lack of urgency, notwithstanding an explicit acknowledgement of things getting worse, looks to have disappointed the market," he said.

European stocks fell, with investors focused on the region's tepid outlook.

Copyright AFP (Agence France-Press), 2019
 

Read Comments