Asian stocks mixed, echoing Wall St sentiments on pandemic
Asian shares are mixed on cautious optimism that upcoming company earnings reports will show some recovery from the damage of the pandemic
May 6, 2021, 4:09 AM
4 min read
Share to FacebookShare to TwitterEmail this articlePeople walk past a bank's electronic board showing the Hong Kong share index at Hong Kong Stock Exchange in Hong Kong Wednesday, May 5, 2021. Major Asian stock markets advanced Wednesday after Wall Street fell, while Chinese and Japanese markets were closed for holidays. (AP Photo/Vincent Yu)
TOKYO -- Asian shares were mixed Thursday on cautious optimism about upcoming company earnings reports showing some recovery from the damage of the coronavirus pandemic.
Japan's benchmark Nikkei 225 jumped 2.0% in morning trading to 29,391.19, in the first session after the Golden Week series of national holidays. South Korea's Kospi gained 0.7% to 3,168.56, but Australia's S&P/ASX 200 dipped 0.5% to 7,057.80. Hong Kong's Hang Seng inched up nearly 0.1% to 28,436.53, while the Shanghai Composite slipped 0.4% to 3,433.39.
Although the vaccine rollout is progressing slowly in Asia, compared to the U.S. and Europe, the global recovery is adding to optimism about exports and earnings of companies doing business overseas.
Japanese shares got a boost from remarks by policymakers at the Bank of Japan expressing resolve to prop up the economy with easy lending and stimulus measures. In the minutes for their meeting in March, they said the negative impact from COVID-19 on global economies was likely decreasing
Major U.S. stock indexes closed mixed after an early technology company rebound faded, tempering the market’s recovery from a sell-off a day earlier.
The S&P 500 eked out a 0.1% gain to 4,167.59 after climbing 0.7% in the early going. The Dow Jones Industrial Average rose 0.3% to 34,230.34, while the tech-heavy Nasdaq slid 0.4% to 13,582.42.
The Russell 2000 index of small-company stocks lost 0.3%, to 2,241.37.
Financial and energy stocks helped keep the S&P 500 out of the red. JPMorgan Chase rose 1.3% and Exxon Mobil added 3%.
Technology stocks, which led the market’s blockbuster rebound in 2020, fell for the seventh straight day. The sector, one of 11 in the S&P 500, is up 4.6% this year, the third-smallest gain in the index after consumer staples and utilities. Energy companies are faring the best with a 38.1% gain so far this year.
The market’s mixed results came as investors remain focused on earnings reports, which have been better than expected. More than half of the companies in the S&P 500 have reported their results so far this earnings season, showing an average profit growth of 54%, according to FactSet.
“It’s been a pretty torrid pace in terms of earnings right now, but not everyone is being rewarded,” said J.J. Kinahan, chief strategist with TD Ameritrade. “To have your stock at least do OK during earnings season: No. 1 beat on revenue and No. 2 talk about a bright rest of the year trend.”
While shares have been pressing higher thanks to expectations that the pandemic is waning, investors remain concerned about the potential for higher inflation, signs of which are already cropping up as higher prices for oil, lumber and other commodities. Remarks by Treasury Secretary Janet Yellen suggesting the Federal Reserve would have to raise interest rates to keep the economy from overheating sparked a late-afternoon sell-off on Tuesday.
Yellen downplayed those remarks, and several Fed officials followed suit Wednesday, which helped boost stocks, said Steve Chiavarone, an equity strategist at Federated Hermes.
“A combination of decent (economic) data, continued good earnings and a coordinated apology tour were enough to get markets to move back in an upward direction,” he said.
General Motors shares rose 4% after the company posted a solid quarterly profit compared to a year earlier, but also affirmed its full-year outlook even as the automaker — like much of its competition — contends with a chip shortage that is impacting production.
