Asian Markets Trade Down, South Korea GDP Expanded, Japan's Wholesale Prices Accelerated

Arjun Pandit
25 Apr, 2023
Mumbai

Asian markets traded down following mixed global markets and investors awaited another batch of domestic earnings. 

In overnight trading, benchmark indexes in the U.S. lacked direction after investors awaited earning from 300 companies this week. 

Leading tech companies including Amazon, Microsoft, Meta Platforms and Alphabet are scheduled to report quarterly results this week. 

Investors have been cautious after large U.S. banks and consumer products companies have met sharply lowered earnings expectations. 

Moreover, most U.S. companies are reporting higher sales and earnings driven by significant price increases offset by volume declines, leading to lower gross margins.  

Ongoing interest rate path worries also kept investors on the sidelines ahead of the Federal Reserve's rate decision next week. 

In Europe, benchmark indexes hovered near record highs but worries of economic slowdown dominated market sentiment. 

Despite the recent cooling of inflation in the Euro Area, financial markets are bracing for additional rate hikes, as the central banks look for ways to cool inflation but that also dampens economic activities and corporate earnings. 

 

Asian Tech Stocks Drive Indexes Lower 

In Asia, tech stocks led the decliners in Hong Kong, Shanghai and Seoul ahead of earnings from big U.S. tech companies. 

The Hang Seng index dropped 1.6% to 19,635.85 and Hang Seng Tech index dropped 3.5%. 

The Shanghai Composite Index declined 0.4% to 3,264.02. 

 

Governor Ueda to Stick to Ultra-loose Rate Policy  

The Nikkei 225 Index in Tokyo added 0.2% to 28,655.62 bucking the downward trend in Asian markets after the recently appointed governor of the Bank of Japan stressed the need of keeping the ultra-loose monetary policy intact for now. 

Governor Kazuo Ueda's comments to parliament come a week before the central bank's monetary policy meeting next week, and the Bank of Japan is expected to keep interest rates near zero. 

The yen drifted lower to 134.66 against the U.S. dollar. 

In economic news, producer price inflation in Japan eased to 1.6% on an annual basis in March, lower than downwardly revised 1.7% in February, the Bank of Japan reported Tuesday. 

On a monthly basis, producer price inflation increased 0.7% in March after rising 0.2% in February. 

 

South Korea's GDP Expanded In First Quarter 

South Korea's GDP expanded 0.8% from a year ago in the first quarter, the Bank of Korea reported Tuesday. 

GDP expanded 0.3% from the previous quarter after contracting 0.4% in the final quarter of 2022. GDP in the first quarter rose after private consumption increased 0.5% compared to a decline of 0.6% in the previous quarter.  

Markets in Australia and New Zealand are closed today to celebrate ANZAC Day.