Tokyo, April 19 (BNA): Asian shares traded mixed on Wednesday, as investors took a wait-and-see attitude ahead of earnings reports and potential moves by central banks.
Japan’s benchmark Nikkei 225 fell 0.2% in morning trade, to 28,590.40. Australia’s S&P/ASX 200 rose 0.1% to 7,370.70. South Korea’s Kospi Index rose less than 0.1%, to 2,573.12. Hong Kong’s Hang Seng Index fell 0.6% to 20,521.13. The Shanghai Composite fell 0.3%, to 3,383.18.
The news that Chinese economic growth accelerated in the last quarter, to 4.5%, did not have much impact on stock prices. While consumption and retail sales grew, other indicators, such as industrial output and fixed-asset investment, were weaker and point to an uneven recovery, Reuters reported.
“It may still be the worst story, but the recovery has shown to be more gradual than a one-shot wonder,” said Yeap Jun Rong, market analyst at IG.
Wall Street closed little changed after a day of choppy trading. The S&P 500 rose 0.1% to 4,154.87 after drifting between small gains and losses throughout the day.
The Dow Jones Industrial Average fell less than 0.1%, to 33,976.63, and the Nasdaq Composite fell less than 0.1%, to 12,153.41.
Lockheed Martin has been one of the biggest gainers on Wall Street. It rose 2.4% after reporting fourth-quarter earnings that beat analysts’ expectations.
Bank of America rose 0.6% after its better-than-expected earnings report sent up and down the trading day. The majority of companies have beat expectations so far in the early days of this reporting season.
Despite this, the bar was down amid Wall Street concerns about continued high inflation, higher interest rates and a slowdown in some sectors of the economy. Analysts came into this reporting season expecting the biggest drop in earnings per share for S&P 500 companies since the pandemic torpedoed the economy in 2020.
Many companies have faltered after failing to live up to expectations. Goldman Sachs fell 1.7% after its revenue fell short of analyst expectations, although earnings beat expectations.
Healthcare stocks were broadly weaker and were the heaviest weighting on the S&P 500 out of the 11 sectors that make up the index. Johnson & Johnson fell 2.8% despite announcing stronger-than-expected earnings and raising its dividend.
Reports from dozens more companies in the S&P 500 will come out later this week. They include big names like AT&T, Tesla, and Procter & Gamble.
Wall Street’s attention will also turn to smaller regional banks due to report, such as KeyCorp and Zions Bancorp, whose shares took a hit last month after the second- and third-biggest US bank failures in history.
The concern was that customers could withdraw their deposits from banks simultaneously, similar to the scramble that toppled Silicon Valley Bank and Signature Bank. Most of the focus has been on regional banks rather than “too big to fail” mega-banks like JPMorgan Chase and Bank of America.
Those big banks have so far reported better-than-expected earnings, and their sheer size may have helped attract deposits amid the turmoil. Their strength has helped add some calm to the markets.
“It appears that the earnings announcements of the major banks have helped calm investors’ anxiety about financial stock reports in the coming days,” Stefano Pascal and other analysts at Barclays said in a report.
The biggest concern for the economy is that problems in the banking industry could cause lending to decline, squeezing an already strained economy under the weight of high interest rates.
The Federal Reserve has raised interest rates at a rapid pace over the past year in hopes of slowing high inflation. High rates can stifle inflation, but only by slowing the entire economy in one draconian measure, increasing recession risks and hurting investment prices.
Inflation is slowing, but still high, and traders widely expect the Federal Reserve to raise interest rates again at its next meeting in May.
In energy trading, the price of US crude settled unchanged at $80.86 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international benchmark, added two cents to $84.75 a barrel.
In currency trading, the US dollar rose to 134.30 yen from 134.12 yen. The euro fell to $1.0971 from $1.0975.
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