Asian Shares Muted In Cautious Trade

Asian stocks were subdued on Thursday and U.S. stock futures declined as investors react to a mixed bag of earnings results from U.S. companies.

Tesla missed profit estimates in the first quarter of 2023 while IBM’s earnings topped estimates.

Expectations of more interest-rate hikes pushed up the U.S. dollar and yields, weighing on sentiment.

Federal Reserve Bank of New York President John Williams said Wednesday that inflation is still at problematic levels and the U.S. central bank will act to lower it. Traders expect a 25-bps rate hike from the Fed next month.

The Federal Reserve said in its monthly Beige Book survey that the U.S economy was “little changed” in recent weeks, with hiring and inflation slowing and access to credit narrowing.

Gold traded below $2,000 per ounce in Asian trading while oil extended losses, after having fallen about 2 percent to a two-week low on Wednesday amid demand worries.

China’s Shanghai Composite index was down 0.3 percent after the country’s central bank kept its benchmark lending rates unchanged for the eighth month. Hong Kong’s Hang Seng index rose 0.4 percent despite skepticism over China’s growth.

Japanese shares were little changed amid speculation that Bank of Japan Governor Kazuo Ueda will leave monetary stimulus unchanged at his first policy meeting next week, citing the recent banking turmoil in the U.S. and Europe.

The yen fell against the dollar after data showed Japan’s trade deficit widened to a record 21.73 trillion yen ($160 billion) in the year to March.

South Korea’s Kospi average eased half a percent while Australia’s benchmark S&P/ASX 200 was marginally higher, led by banks.

New Zealand’s benchmark S&P/NZX-50 index was down 0.3 percent as new data showed consumer inflation remained near historic highs in the first quarter.

U.S. stocks ended flat for the second straight session overnight following mixed corporate earnings from top companies including Netflix, Travelers and Morgan Stanley.

Traders also reacted to rising Treasury yields and the Fed’s Beige Book survey results showing that economic activity was little changed in recent weeks.

The tech-heavy Nasdaq Composite edged up marginally while the S&P 500 ended flat with a negative bias and the Dow eased 0.2 percent.

European stocks also ended mixed on Wednesday as investors digested U.K. inflation data and hawkish comments from Federal Reserve officials on the trajectory of interest rates hikes.

The pan European STOXX 600 slipped 0.1 percent. The German DAX edged up marginally and France’s CAC 40 added 0.2 percent while the U.K.’s FTSE 100 slid 0.1 percent.

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