Asian Stocks Drift; Strong Earnings from Microsoft Corp. Boost Nasdaq Futures

27/01/2021 Asian markets traded sideways Wednesday as investors mulled a slew of earnings reports and hurdles to stimulus. Shanghai remained flat, while Australia underperformed as it reopened after a holiday. Nasdaq futures jumped following a strong earnings report from Microsoft Corp. S&P 500 futures fluctuated after the benchmark ended yesterday’s lower. The dollar on the back foot against major peers on Wednesday as markets await comments from Fed. Chair Powell, who is likely to sound dovish. Oil prices climbed on data showed U.S. crude stockpiles fell last week and China reported its lowest daily rise in COVID-19 cases, bolstering hopes of a pick-up in demand. U.S WTI crude futures rose 0.36%, to $52.80 a barrel, while Brent crude futures are 0.34% firmer at $56.10.

The JSE lost 0.99% to 63,923.63 points and the Top-40 1.16% on Tuesday, with Naspers and Prosus falling 4.96% and 5.21% respectively. The U.S stimulus package is still far from done-deal as the proposed $1.9-trillion injection is facing increasing resistance from Republicans, calling for a smaller number. Banks gained 1.9% and financials 1.58%, as the rand broke a three-day losing streak strengthening alongside its emerging-market peers – an intraday best of R15.0400/$.

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Annual General Meetings:

European equities markets advanced on Tuesday as share buybacks and earnings outweighed concerns over the spread of coronavirus and Italian politics. The pan-European Stoxx 600 index rose 0.63%, alongside a gain of 1.66% for the German Dax while the FTSE 100 ended the session up 0.23%. The EU hit out at AstraZeneca, claiming the company was failing to honour its contracts.

On Tuesday S&P 500 fell from a record high with investors turning their focus to the FOMC’s meeting and a slate of earnings reports. Home prices and consumer confidence signalled at a recovery, but freshly instituted travel restrictions stoked concern about the pace of the recovery. Both the Dow an Nasdaq closed flat -0.07%, while the S&P 500 slipped -0.15% for the day. The IMF updated its World Economic Outlook forecasts on Tuesday and said it now expects overall global growth of 5.5%, an upgrade of 0.3%, to reflect the rollout of Covid-19 vaccines and economic stimulus packages. U.S futures, the Dow and S&P 500, both in the red as traders await the FOMC decision, and Nasdaq futures up 0.43% after Microsoft earnings.

In Australia, the ASX 200 was down 0.65% after returning from a holiday. CPI rose 0.9% both quarter-on-quarter and year-on-year during the fourth quarter of 2020. Hong Kong’s Hang Seng edged up 0.10%.
China’s Shanghai Composite inched up 0.37%. Japan’s Nikkei 225 was up 0.26%, the country’s state of emergency, currently set to expire on Feb. 7, could reportedly be extended until the end of February.