Asian stocks slip as tech earnings offset Gulf and Fed uncertainty
Asian equities edged lower in early trade on Thursday, with MSCI's broadest index of Asia-Pacific shares outside Japan down 0.2% and on course for a fourth consecutive weekly decline. Japan's Nikkei gave up earlier gains to trade 0.4% lower and Korean shares fell more than 1%, while S&P 500 e-minis were down 0.4% at 7,765.8.
The softer tone followed a higher Wall Street close led by the tech-heavy Nasdaq, where better-than-expected results from market heavyweights eased some concerns about the sustainability and profitability of large AI build-outs. Meta reported third-quarter revenue ahead of expectations and AI server maker Super Micro forecast quarterly revenue and profit margin above estimates, though Meta's plan to issue non-voting Class C common stock drew renewed scrutiny of AI spending.
Kyle Rodda said there was a lot of noise at the moment and investors were still digesting that morning's results. He added that the market was really only at the start of the meaty part of earnings season, which was coming at the same time that investors were tackling the uncertainty from an upcoming Fed decision, geopolitical risks, and US mid-terms.
Risk appetite stayed subdued in rates markets, with the yield on benchmark 10-year Treasury notes down 4.2 basis points at 5.1065% and the 30-year yield at a one-week low of 5.3968%. Brent crude rose 1.1% to $110.03 a barrel, near a five-month high, after the US ordered diplomats to leave Saudi Arabia amid Houthi strikes; the New York Times reported that the US and Israeli militaries had developed specific plans for renewed attacks on Iran after the US midterm elections on November 3.
The dollar index dipped to 102.2, the euro was little changed at $1.1231 and the yen flat at 158.125 after Deputy Bank of Japan Governor Ryozo Himino signalled readiness to raise borrowing costs. The Korean won was muted at 1325.9 after the Bank of Korea left its benchmark rate unchanged at 3.00%. Gold was slightly lower at $4115.5 an ounce, bitcoin was down 0.4% at $84,284.05 and ether 0.6% lower at $2,476.34.
