TOKYO / NEW YORK (Reuters) – Asian stocks fell on Wednesday as investors watched the Federal Reserve’s guidance on its monetary policy, while futures for US equities rose after strong gains from Microsoft.
European equities are expected to decline slightly, with EuroStoxx 50 futures down 0.3% and FTSE futures down 0.4%.
The MSCI range of Asian stocks in Japan fell 0.2%, lower than earnings from equity stocks, as some investors worried about widespread valuations.
“The global economy seems to be losing momentum and there is still no clear sign that COVID-19 infections are slowing down, even after vaccinations have started in some places. I expect the shares to remain blocked for a while, “said Hisashi Iwama, senior portfolio manager at Asset Management One.
But the technology sector remained a bright spot after Microsoft’s gains raised Nasdaq futures by 0.5%, while Japan’s Nikkei also rose 0.3%.
Shares of Microsoft rose 3.7% in extended trading, after its cloud computing services Azure rose 50%, boosting optimism for other US technology giants, including Apple and Facebook, which announced quarterly results later.
“Microsoft’s earnings have been superb, even compared to strong market expectations,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“The shares of those tech firms are in a bit of a weakness since August, but are likely to lead the market again, given their solid prospects,” he said.
Peak in August, the combined market capitalization of the top five US technology companies, which also includes Amazon and Alphabet, reached 24.6% of the US blue chip’s S & P500 index. It stood at 22.7%, well above 15% two years ago.
S & P500 futures were largely flat, cautiously capped ahead of the Fed’s policy meeting, as well as taking profit on cyclical equities after this month’s stellar gains.
The S & P500 is now trading at 22.7 times its expected earnings, close to its September peak of 23.1 times, which was the most inflated level since the 2000 dotcom balloon.
An increase in the shares of the video game company Gamestop, led by retail investors, has also raised some concerns that a rally driven by a lot of stimulus money from governments and central banks has become extremely.
However, analysts expect the US Federal Reserve to remain in its square tone to help accelerate the economic recovery as it closes its two-day political meeting on Wednesday.
U.S. stimulus talks are also in the spotlight, with U.S. Senate Majority Leader Chuck Schumer saying Democrats will continue President Joe Biden’s $ 1.9 trillion aid plan without Republican support if necessary.
The 10-year benchmark yield was 1.035% after hitting a three-week low of 1.028% on Tuesday on rising speculation that Biden should reduce and possibly delay its plan. ambitious stimulation.
The US dollar has moved slightly, with investors awaiting the Fed’s decision on whether they should buy riskier currencies.
The dollar index flirted with this week’s low at 90,204, while the euro remained firm at $ 1,2161.
The pound rose to $ 1.3753, a level last seen in May 2018, while the Japanese yen changed hands at $ 103.70.
The Australian dollar fell 0.1% to $ 0.7739, showing a weaker-than-expected response to local inflation data.
Oil prices were supported by economic optimism, with US crude oil futures trading up 0.6 percent to $ 52.95 a barrel.
The International Monetary Fund has raised its forecast for global growth in 2021, as widely expected, and many investors expect the global economic recovery from the pandemic crisis to return.
Editing by Lisa Shumaker and Sam Holmes