Asia report: Stocks mixed ahead of big US tech earnings

Stock markets in Asia had mixed results by the close on Tuesday, with Hong Kong's Hang Seng Index leading the losers.

Investors were looking ahead to earnings reports from big US technology companies amid Wall Street’s ongoing earnings season, including Google owner Alphabet, Amazon, Facebook parent Meta, and Microsoft.

“Asian equity markets are trading with a subdued tone following a lacklustre session on Wall Street, as manufacturing survey data disappointed,” said TickMill market analyst Patrick Munnelly.

“After hours, one of the poster children for the banking crisis reported earnings - First Republic Bank surprised to the downside, which created jitters amongst investors as the shares shed another 20% and left lingering concerns about further problems within the regional banking sector in the US.”

Munnelly said the Shanghai Composite and Hang Seng Index were both under pressure, as concerns over China’s economic recovery and ongoing geopolitical tensions kept investors on the sidelines.

“The Hang Seng has surrendered the 20,000 handle, while the mainland index has seen some support from scheduled liquidity provision from the People’s Bank of China.”

Japan on the front foot, other bourses weaker

The Nikkei 225 in Japan rose slightly by 0.09% to 28,620.07, while the Topix increased 0.24% to 2,042.15.

Mitsubishi Electric, Daiwa House Industry, and Nomura were among the top gainers on Tokyo’s benchmark, with increases of 3.28%, 2.68%, and 2.18%, respectively.

China's Shanghai Composite declined 0.32% to 3,264.87, and the Shenzhen Component fell 1.48% to settle at 11,149.01.

CETC Digital Technology, Beijing United Information Technology, and Hubei TKD Crystal Electronic Science and Technology were among the biggest losers in Shanghai, with declines of 10.02%, 10%, and 9.99%, respectively.

In Hong Kong, the Hang Seng Index fell 1.71% to 19,617.88, with WuXi Biologics, Xinyi Solar, and SMIC leading the losses, with declines of 7.12%, 6.88%, and 5.65%, respectively.

South Korea's Kospi dropped 1.37% to 2,489.02, with SK IE Technology, Posco Holdings, and Posco Chemical among the biggest fallers, declining by a respective 5.53%, 4.77%, and 4.4%.

Markets in both Australia and New Zealand were closed on Tuesday, for the ANZAC Day public holiday.

In the currency markets, the yen was last 0.29% stronger on the dollar to trade at JPY 133.85, while the Aussie weakened 0.43% to AUD 1.4998.

The Kiwi remained relatively stable against the greenback, managing gains of 0.04% to change hands at NZD 1.6208.

On the oil front, both Brent crude and West Texas Intermediate futures were down 0.42%, with respective prices of $82.38 per barrel on ICE and $78.43 on NYMEX.

Korean GDP grows in first quarter, unemployment falls in Hong Kong

In economic news, the Bank of Korea reported that South Korea's gross domestic product (GDP) rose 0.8% year-on-year in the first quarter compared to a year ago - slightly below the 0.9% growth economists had pencilled in.

On a quarter-on-quarter basis, the country’s GDP was ahead 0.3%, beating expectations for 0.2%.

“The economy avoided a recession, with growth coming in stronger than expected in the first quarter,” noted analysts at SP Angel.

“Domestic consumption improved during the quarter, supporting growth, while weaker exports weighed on trade amid falling semiconductor prices.”

Elsewhere, Hong Kong's unemployment rate declined to 3.1% in the first quarter, compared to 3.3% in the prior three-month period.

It made for the 10th consecutive month of falling unemployment for the special administrative region, and was the lowest rate since before the Covid-19 pandemic, in October 2019.

The city’s statistics department said there was a decrease in the building maintenance, repair, and decoration sector, as well as in the wholesale sector.

In China, Reuters reported that banks were advised to cut deposit interest rates further in a bid to redirect savings into spending and investments.

It said one of the country’s ‘big four’ state lenders was planning to cut some of its personal and corporate rates next week, according to a source briefed on the plans.

Finally, in Japan, central bank governor Kazuo Ueda told the country’s parliament that its ultra-easy monetary policy needed to be maintained for the time being.

However, the Bank of Japan head said policymakers were ready to increase interest rates if wages and prices rose faster than expected.

The BoJ is set to meet later in the week, chaired for the first time by Ueda since he took over earlier in April.

Reporting by Josh White for Sharecast.com.