Asia shares anxious for earnings season, U.S. data deluge
Asian shares faltered on Monday as anxious investors wait to see if U.S. earnings can justify sky-high valuations, while a rally in bonds could be tested by what should be very strong readings for U.S. inflation and retail sales this week.
India stocks lead losses as Asia-Pacific stocks mostly fall; Alibaba shares surge following fine
Stocks in India led losses as Asia-Pacific shares mostly declined on Monday.
Both the Nifty 50 and BSE Sensex in India dropped more than 3% each in Monday afternoon trade as coronavirus cases in the country spike.
The losses came as the Covid-19 situation in the country remains severe, with Reuters reporting the hardest-hit state of Maharashtra is considering a lockdown.
Meanwhile, mainland Chinese stocks also fell on the day. The Shanghai composite declined 1.09% to 3,412.95 while the Shenzhen component dropped 2.299% to 13,495.72. Hong Kong’s Hang Seng index slipped nearly 1%, as of its final hour of trading.
In Japan, the Nikkei 225 fell 0.77% to close at 29,538.73 while the Topix index finished its trading day 0.25% lower at 1,954.59. South Korea’s Kospi bucked the regional trend to close 0.12% higher at 3,135.59.
Stocks in Australia slipped. The S&P/ASX 200 fell 0.3% on the day to 6,974.
MSCI’s broadest index of Asia-Pacific shares outside Japan declined 1.13%.
- Shares in Alibaba Group Holding Ltd rose 16% after China slapped a record 18 billion yuan ($2.75 billion) fine on the e-commerce giant. Over a third of the stock is held by U.S. investors, and it makes up more than 8% of the MSCI EM index.
- Over the weekend, Federal Reserve Chair Jerome Powell said the economy was about to start growing much more quickly, though the coronavirus remained a threat.
- Data out this week are expected to show U.S. inflation jumped in March, while retail sales is seen surging perhaps even with a double-digit gain. Treasury is also set to test demand with offers of $100 billion in debt this week.
· European stocks ease from record high ahead of earnings season
European stocks eased from all-time highs on Monday as investors held off from making big bets ahead of the earnings season, while British retailers were set to reopen as the economy emerges from a strict winter lockdown.
The pan-European STOXX 600 index slipped 0.1% by 0711 GMT, following Asian markets into the red as investors waited to see if U.S. earnings can justify sky-high valuations. There were some concerns as COVID-19 cases continued to surge globally.
· U.S. equities still provide ‘the most attractive value’, says strategist
Nupur Gupta from Eastspring Investments explains why she is “maximum bullish” on U.S. stocks despite concerns about high valuations.
· U.S. Market focus on earning seasons:
It is also likely to show in profits. The banks kick off first-quarter earnings season this week with Goldman Sachs, JPMorgan and Wells Fargo scheduled to report on Wednesday.
Analysts expect profits for S&P 500 firms to show a 25% jump from a year earlier, according to Refinitiv IBES data. That would be the strongest performance for the quarter since 2018.
Reference: CNBC, Reuters
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