TOKYO / NEW YORK (Reuters) – Asian stocks fell on Wednesday as investors watched Federal Reserve guidelines on its monetary policy, while U.S. technology stock futures jumped after Microsoft’s strong gains.
European equities are expected to fall slightly, with EuroStoxx 50 futures falling 0.3% and FTSE futures falling 0.4%.
The value of MSCI’s former Asian-Japanese shares fell 0.2%, dragged down by profit-taking from resource stocks, as some investors have distrusted the valuations pulled.
“The global economy seems to be losing momentum a bit and there is still no clear sign that COVID-19 infections will be reduced, even after vaccinations have started in some places. I hope the actions will be blocked for for a while, ”said Hisashi Iwama, senior portfolio manager at Asset Management One.
But the technology sector remained at a bright spot after Microsoft’s profits lifted Nasdaq futures by 0.5%, while Japan’s Nikkei also rose 0.3%.
Shares of Microsoft rose 3.7% in expanded trading after Azure’s cloud computing services grew 50%, boosting optimism for other U.S. technology giants, including Apple and Facebook, announcing quarterly results later.
“Microsoft’s profits were excellent, even compared to strong market expectations,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“These actions by tech companies have been on a bit of a challenge since August, but they are likely to lead the market again, given their solid prospects,” he said.
At its peak in August, the combined market capitalization of the five largest technology companies in the United States, which also includes Amazon and Alphabet, reached 24.6% of the S & P500 index of northern blue chips. American. It stood at 22.7%, still well above 15% two years ago.
The S & P500 futures were mostly flat, cautiously limited ahead of the Fed’s policy meeting, as well as taking advantage of cyclical stocks after stellar gains this month.
The S & P500 is now trading at 22.7 times its expected earnings, close to the 23.1-fold high in September, which was its most inflated level since the 2000 dotcom bubble.
An increase in the shares of the video game company Gamestop driven by retail investors also raised some concerns about the fact that a rally driven by a large amount of stimulus money from governments and central banks has become extreme.
Still, analysts expect the U.S. Federal Reserve to maintain its impoverished tone to help accelerate the economic recovery when the two-day political meeting concludes on Wednesday.
U.S. stimulus talks also focus on the fact that U.S. Senate Majority Leader Chuck Schumer said Democrats will move forward on President Joe Biden’s coronavirus relief plan. $ 1.9 trillion, without Republican support if necessary.
The 10-year benchmark yields rose 1.035%, after hitting a three-week low of 1.028% on Tuesday to heighten speculation that Biden may have to reduce and possibly delay its ambitious stimulus plan.
The U.S. dollar moved little as investors waited for the Fed’s decision to get clues as to whether to buy riskier currencies.
The dollar index flirted with this week’s low at 90,204, while the euro held firm at $ 1,2161.
The pound sterling rose to $ 1.3753, a level last seen in May 2018, while the Japanese yen changed hands at 103.70 per dollar.
The Australian dollar fell 0.1% to $ 0.7739, showing a silent response to stronger-than-expected local inflation data.
Oil prices were supported by economic optimism, and futures on U.S. crude rose 0.6% to $ 52.95 a barrel.
The International Monetary Fund raised its global growth forecast for 2021, as widely expected, and many investors expect the global economic recovery from the pandemic-driven recession to continue.
Edited by Lisa Shumaker and Sam Holmes