Asian shares exhibited a mixed performance on Thursday following the Federal Reserve’s recent interest rate cut. This decision was widely anticipated and aimed at stimulating the economy. Despite the positive sentiment from the U.S. market, concerns arose after Oracle Corporation reported disappointing earnings, leading to significant declines in technology shares across the region.
In Tokyo, the Nikkei 225 index fell by 0.9% to close at 50,148.82, primarily influenced by a 7.7% drop in shares of SoftBank Group Corp., a key player in the artificial intelligence sector. The market sentiment was further dampened by growing expectations surrounding a potential interest rate increase from the Bank of Japan at its upcoming meeting.
Hong Kong’s Hang Seng index reversed earlier gains, ending down 0.1% at 25,513.38. This decline followed the Hong Kong Monetary Authority’s decision to lower borrowing costs to 4.00%, the lowest level since October 2022. Meanwhile, the Shanghai Composite index decreased by 0.7% to 3,873.32, reflecting cautious sentiment ahead of China’s November credit data. New yuan loans had sharply declined in October, indicating weaker consumer demand than anticipated.
Australia’s S&P/ASX 200 showed some resilience, adding nearly 0.2% to reach 8,592.00, buoyed by strong performances in gold and mining stocks. The unemployment rate in Australia remained stable at 4.3% for November, slightly better than the expected 4.4%.
In South Korea, the Kospi index fell by 0.6% to 4,110.62, with chip maker SK Hynix experiencing a 3.8% dip following warnings from the stock exchange regarding its rapid rise this year. Taiwan’s Taiex index closed 1.3% lower, while India’s BSE Sensex managed a modest increase of 0.4%.
The U.S. stock market had a positive session on Wednesday, with the S&P 500 rising by 0.7% to 6,886.68, just shy of its all-time high from October. The Dow Jones Industrial Average climbed 1% to 48,057.75, while the Nasdaq composite increased by 0.3% to 23,654.16. The Federal Reserve’s interest rate cut typically boosts market performance, as it can stimulate economic growth and investment.
However, remarks from Fed Chair Jerome Powell regarding the current economic landscape highlighted a delicate balance between job market pressures and inflation risks. Powell noted that the Fed is assessing its options without immediate plans for further rate changes, allowing time to gather more data on both inflation and employment.
On Wall Street, notable gains were seen in GE Vernova, which surged 15.6% after the energy company updated its revenue forecast and announced an increase in its dividend and stock buyback program. Other companies like Palantir Technologies and Cracker Barrel Old Country Store also saw gains of 3.3% and 3.5%, respectively.
In the commodities market, U.S. benchmark crude oil prices fell by 31 cents to $58.15 per barrel, while Brent crude dropped 34 cents to $61.87 per barrel. The U.S. dollar strengthened slightly against the Japanese yen, rising to 156.04 from 156.02 yen. Conversely, the euro slipped to $1.1687 from $1.1696.
Overall, the mixed performance of Asian shares reflects a combination of optimism from the U.S. market and underlying concerns surrounding corporate earnings and economic indicators. The coming days may provide further insights, particularly with upcoming data releases from major economies.
