Stocks fell yesterday in Japan, the only major Asian market open amid a slew of regional holidays, as investors braced for earnings this week from Sony, Honda and other major names.
The benchmark Nikkei 225 stock average ended down 0.8 percent at 7,682.14 after tumbling 3.8 percent to a two-month low on Friday. The broader TOPIX index fell 0.7 percent to 768.28.
US stock index futures were down, suggesting Wall Street would open lower yesterday. Dow futures fell 66 points, or 0.8 percent, to 7,907 and S&P 500 futures slipped 9 points, or 1.1 percent, to 814.50.
On Friday, investors’ ambivalence about earnings reports produced a mixed performance on Wall Street, with the Dow Jones industrials falling 0.6 percent to 8,077.56, but broader stock indicators rising.
Markets in Hong Kong, China, South Korea, Singapore and Taiwan were closed for the Lunar New Year holidays. Australian and Indian markets were also closed for national holidays.
In Tokyo, nervous investors were in no mood to buy ahead of the expected flurry of dismal third quarter results and a worsening outlook, said Masayoshi Okamoto, head of dealing at Jujiya Securities in Tokyo.
“They’re hanging back and trying to figure out what to do next,” he said. “[Earnings] will likely be worse than anyone imagined, and investors know that the situation will deteriorate even further in the January-March quarter.”
Battered by a global slump, Japan’s big exporters have been slashing production, earnings forecasts and jobs, and stock prices have fallen accordingly.
Sony Corp, which last week projected its first annual net loss in 14 years, fell 3.1 percent. The electronics giant reports fiscal third quarter results on Thursday, followed by Honda Motor Co on Friday.
But Nomura Holdings Inc, which reports today, managed to edge up 0.5 percent on hopes that in the third quarter, Japan’s top brokerage had finished writing off costs related to its purchase of Lehman Brothers’ operations in Asia, Europe and the Middle East.
The issue rose despite weekend news reports that Nomura’s October-December losses could total a worse-than-expected ¥300 billion (US$3.4 billion).
Among the few stock markets open in the region, Thailand’s benchmark index rose 0.8 percent and the Philippines’ key index was up 0.7 percent. New Zealand’s market ended flat.
Australia’s market, closed for Australia Day, will reopen today, as will trading in India, which was observing Republic Day.
Markets in Singapore and South Korea will reopen tomorrow, Hong Kong’s markets will reopen on Thursday and trading in China and Taiwan will resume on Monday
Meanwhile, US President Barack Obama’s top economic adviser did not rule out that more money might be needed to stabilize the US financial system.
The Federal Open Markets Committee meets today and tomorrow, with the market awaiting signs of how the Fed will help the broader US economy now its main monetary tool, the fed funds rate, is set to remain in a range of zero to 0.25 percent.
“What investors are concerned about most is the health of the UK and European banking sectors and that is hitting European currencies and lifting the dollar, while hopes for the Obama administration helping the US economy persist,” said Yasutoshi Nagai, senior economist at Daiwa Securities SMBC.
AI SPLURGE: The four major US tech companies have lost more than US$950 billion in value since releasing earnings and outlooks, while equipment makers were gaining Four of the biggest US technology companies together have forecast capital expenditures that would reach about US$650 billion this year — a flood of cash earmarked for new data centers and all the gear within them. The spending planned by Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp, all in pursuit of dominance in the still-nascent market for artificial intelligence (AI) tools, is a boom without a parallel this century. Each of the companies’ estimates for this year is expected either near or surpass their budgets for the past three years combined. They would set a high-watermark for capital spending
China’s top chipmaker has warned that breakaway spending on artificial intelligence (AI) chips is bringing forward years of future demand, raising the risk that some data centers could sit idle. “Companies would love to build 10 years’ worth of data center capacity within one or two years,” Semiconductor Manufacturing International Corp (SMIC, 中芯) cochief executive officer Zhao Haijun (趙海軍) said yesterday on a call with analysts. “As for what exactly these data centers will do, that hasn’t been fully thought through.” Moody’s Ratings projects that AI-related infrastructure investment would exceed US$3 trillion over the next five years, as developers pour eye-watering sums
Bank of America Corp nearly doubled its forecast for the nation’s economic growth this year, adding to a slew of upgrades even after a rip-roaring last year propelled by demand for artificial intelligence (AI). The firm lifted its projection to 8 percent from 4.5 percent on “relentless global demand” for the hardware that Taiwanese companies make, according to a note dated yesterday by analysts including Xiaoqing Pi (皮曉青). Taiwan’s GDP expanded 8.63 percent last year, the fastest pace since 2010. The increase “reflects our sustained optimism over Taiwan’s technology driven expansion and is reinforced by several recent developments,” including a more stable currency,
COLLABORATION: Taiwan and the US could jointly find solutions to weaknesses in supply chain resilience for critical materials, focusing on mining and initial refinement Taiwan is likely to purchase rare earths from the US in the future, and is also in talks with Australia and Canada to strengthen global rare earth supply chain security, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Taiwan and the US last month concluded the sixth Economic Prosperity Partnership Dialogue, during which both sides signed a joint statement endorsing the principles of the Pax Silica Declaration, pledging to deepen cooperation in areas including critical minerals. At the time, Kung said the two sides would establish working groups to advance cooperation in areas including artificial intelligence, digital infrastructure, critical materials and
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