What you need to know:
> Impact of souring tech sentiment uneven for Asia equities.
> Sydney tech stocks up 0.8 per cent but Hong Kong segment falls 0.4 cent.
> Yields on Japan’s 10-year sovereign notes climb above 0.1 per cent.
> Oil prices hold on to gains from Saudi announcement.
Stock Maket News Today:
Amazon blew past Wall Street forecasts as its diversification into higher-margin cloud computing and the dominance of its online retail business produced the first $2bn quarterly profit in its history.
The second-quarter results were a bright spot in gloomy week for the technology sector, coming a day after Facebook stunned investors with a prediction of slowing growth, sending its shares down nearly 20 per cent and wiping more than $120bn from its market capitalisation.
Amazon, which only crossed the $1bn mark for quarterly profit at the end of last year, reported $2.5bn in net income in quarter ending in June. The company’s shares surged in after-hours trading despite revenue missing analysts’ expectations.
Mueller eyes Trump tweets.
Donald Trump has used Twitter as a key public relations weapon, but the president’s attacks on senior officials including the attorney-general and the FBI director are now being scrutinised by special counsel Robert Mueller as potential obstructions to his investigation.
China’s blocking of chip merger changes M&A landscape.
Beijing’s decision to not allow the Qualcomm-NXP merger killed what would have been a transformative deal for Qualcomm and threatens to change the mergers and acquisitions landscape for US technology companies.
New data on Friday are expected to show renewed momentum in consumer spending, growth in capital expenditures and a net boost from trade. The top economic adviser to the president said the figures would be “big”.
Asia technology stocks put in a mixed performance on Friday that was mirrored by broader benchmarks throughout the region in the wake of a record fall for Facebook. Sydney’s mining sector gained on a major deal between BHP Billiton and BP while the yield on 10-year Japanese government bonds once again rose above 0.1 per cent and oil prices pared gains from earlier in the week.
European stocks are expected to rise, with opening calls from CMC Markets pointing to a 0.3 per cent gain for London’s FTSE 100 and one of 0.2 per cent for Frankfurt’s Xetra Dax 30.
Asia Pacific equities benchmarks were mixed on Friday as a sharp drop by the tech-heavy Nasdaq Composite on Wall Street overnight had an uneven impact on tech stocks in the region.
A 19 per cent fall by Facebook helped drag the Nasdaq 1.4 per cent lower while the broader S&P 500 index closed out Thursday’s session down 0.3 per cent.
But Tokyo’s Topix index was up 0.4 per cent with gains of 0.7 per cent for industrials and a rise of 0.3 per cent for tech stocks. Seoul’s Kospi index meanwhile was up 0.1 per cent.
In Sydney the tech segment of the S&P/ASX 200 rose 1.8 per cent as the broader index climbed 0.7 per cent, bolstered by a 1 per cent rise in mining stocks. BHP Billiton climbed as much as 2.8 per cent to a 10-week high after the Anglo-Australian miner agreed a deal to sell its shale assets in Texas to BP for $10.5bn.
Hong Kong’s benchmark Hang Seng index was flat after walking back an initial tech-driven dip, with that segment pulling back from a drop of more than 1 per cent to be down just 0.4 per cent while financials recouped early losses to trade flat by midday. The CSI 300 index of Shanghai and Shenzhen-listed stocks was off 0.1 per cent.
Forex and fixed income:
Yield on the 10-year Japanese government bond, which moves opposite price, rose 1 basis point to be back above the 0.1 per cent mark after briefly breaching that level on Thursday for the first time in nearly six months on speculation the country’s central bank could scale back its stimulus programme.
Ten-year US Treasury yields were flat at 2.978 per cent.
The dollar was largely holding on to gains made during Thursday’s session after the European Central Bank left its monetary policy stance unchanged and confirmed plans to halt asset purchases by the year’s end as expected. A pick-up in durable goods orders in the US had also bolstered the dollar index, which tracks the greenback against a basket of peers and was 0.1 per cent lower on Friday in Asia at 94.704.
Oil prices were virtually flat on Friday after climbing in the wake of Saudi Arabia’s move earlier in the week to suspend oil shipments through the Red Sea following an attack from Yemeni Houthi rebels on two of its giant crude carriers.
Brent crude, the international benchmark, was steady at $74.53 a barrel while US marker West Texas Intermediate stood unchanged at $69.61.
Gold rose 0.2 per cent to $1,224.01 per ounce.