Asia-Pacific Shares Called Mixed to Lower on Opening; Investors Hoping for US Tech Stock Bailout
The major Asia-Pacific stock indexes are called lower on Wednesday, following Wall Street’s weaker lead as the rout on Hong Kong and China tech stocks is expected to resume. Conditions could change ahead of the openings, however, if the U.S. markets can get back on track after key technology companies report their latest quarterly data after the U.S. close.
Shares in the Asia-Pacific region were mixed on Tuesday as the sell-off of major Chinese tech stocks in Hong Kong continued following Monday’s tumble. The broader Hang Seng Index in Hong Kong briefly fell more than 5% in Tuesday afternoon trading (local time) before paring some of those losses, eventually closing 4.22% lower at 25,086.43.
The Hang Seng Index is off more than 8% in just two days of trading this week. On Monday, it was also hit hard, falling more than 4% on the back of regulatory fears surrounding China’s technology and private education sector.
Wall Street Could Fuel Early Session Weakness in Asia-Pacific Region
U.S. stocks fell for the first time in six days on Tuesday ahead of quarterly earnings reports from several megacap technology companies. The blue chip Dow Jones Industrial Average decline 170 points. The benchmark S&P 500 Index fell 0.8%, led by weakness in consumer, technology and energy sectors. The NASDAQ Composite retreated 1.6%. The drop in the major averages from their respective records reached on Monday could bring an end to their five-session winning streaks.
Of concern for Asia-Pacific traders will be the U.S. market’s reaction after the closing bell in New York. Second-quarter earnings season will kick into high-gear with Google-parent Alphabet, Microsoft and Apple set to report after the bell on Tuesday. The trio of tech heavyweights is down about 1% each ahead of their numbers.
Fedwatch Continues
Investors are awaiting the Federal Reserve’s update on its monetary policy as the central bank’s two-day meeting began. The Federal Open Market Committee will release a statement when the meeting concludes Wednesday, followed by Chairman Jerome Powell’s news conference.
Since the Fed will make its announcements at 18:00 Wednesday, Asia-Pacific traders won’t have a chance to react to the news until Thursday’s opening.
Nikkei Closes Below 28,000 Level for Second Day
Japanese equities rose on Tuesday, tracking overnight gains on Wall Street as investors cheered upbeat corporate earnings, but the benchmark Nikkei 225 failed to close above the 28,000 key psychological level for a second straight session.
Like Monday, the Nikkei briefly traded above that level but pared gains before the close amid caution ahead of this week’s Federal Reserve policy meeting and a pick-up in both the U.S. and Japanese earnings seasons.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
