HONG KONG (Reuters) – Asian shares sat out a global rally on Friday as disappointing earnings from Chinese e-commerce giant Alibaba reinforced worry about slowing growth in the world’s second-largest economy, even as European and U.S. share futures indicated gains.
Elsewhere, Turkey’s lira could not break far from Thursday’s record low when it weakened about 6% after the central bank, under pressure from President Tayyip Erdogan, cut rates again even as inflationary risks broadened.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.44% and was set for a weekly decline of 1%, even after a solid performance overnight on Wall Street boosted by upbeat corporate earnings.
That global rally seemed set to continue with Euro Stoxx 50 futures gaining 0.41%, FTSE futures advancing 0.42% and S&P 500 e-minis up 0.36%.
The tone was more subdued in Asia, with the Hong Kong benchmark down sharply 1.5%, dragged down by index heavyweight Alibaba.
The Chinese e-commerce firm’s shares tumbled more than 10% after its second-quarter results missed expectations due to slowing consumption, increasing competition and a regulatory crackdown.
Kenny Ng, a strategist at brokerage Everbright Sun Hung Kai Securities, said as well as Alibaba, recent poor results at Baidu, which was off 3%, and Bilibili, whose shares are suspended, had reinforced the downward trend.
Given the sharp slowdown in recent Chinese retail data more broadly, analysts at Citi said in a note Alibaba’s results were not surprising.
Chinese economic data over recent months has also underlined a loss of growth momentum, dragging down stocks across the region.
MSCI’s Asian regional benchmark is down 13% from its February high, while MSCI’s gauge of stocks across the globe sits at a record high.
Analysts at ANZ expect Asian stocks to continue to struggle.
“A confluence of powerful headwinds is building – a slowing China, higher commodity prices at the wrong time of the business cycle, and a mild rebound in household demand,” they said.
“Each of these developments, combined with monetary policy normalisation, can weigh on stock market earnings and valuations.”
Tokyo’s Nikkei outperformed, however, rising 0.50% after Japanese Prime Minister Fumio Kishida announced a fresh stimulus package with spending worth around 56 trillion yen ($490 billion). [.T]
The yen hardly reacted to the news, and was headed for a small weekly loss, trading at 114.33 per dollar in sight of its almost five-year low of 114.97 a few days ago.
Other major currencies were also largely quiet with the dollar sitting just below a 16-month high hit against a basket of its peers earlier in the week.[FRX]
U.S. benchmark Treasury yields were steady at 1.5942%.
“There is a lot already in the price and as a result, progress toward higher yields is likely to be slow and defined by momentum shifts and sentiment swings,” said analysts at Westpac in a note. [US/]
Oil prices were continued their recent volatility. U.S. crude rose 0.96% to $79.77 a barrel. Brent crude rose 0.97% to $82.03 per barrel. [O/R]
On Thursday, oil fell to six-week lows after Reuters reported, citing sources, that the Biden administration asked some of the world’s largest oil consuming nations – including China, India and Japan – to consider releasing crude stockpiles in a coordinated effort to lower global energy prices.
Spot gold rose 0.11%.
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