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James Hyerczyk
Asian Shares Lower

The major Asia Pacific shares are trading lower on Friday as investors continue to digest comments from European Central Bank President Mario Draghi that have led some to believe the U.S. Federal Reserve could be less aggressive than expected with monetary policy at next week’s meeting on July 30-31.

In his press conference on Thursday, Draghi said the risk of a recession in the Euro Zone was low despite earlier signaling a rate cut and more monetary easing ahead. Some U.S. traders took this to mean the central bank would not be as aggressive in its easing measures and that the Fed could follow suit when it meets next week. Although U.S. investors are still pricing in a 25-basis point rate cut, the chances of a more aggressive 50-basis point rate cut have been greatly reduced.

At 06:07 GMT, Japan’s Nikkei 225 Index is trading 21652.50, down 104.05 or -0.48%. Hong Kong’s Hang Seng Index is at 28472.37, down 121.93 or -0.43% and South Korea’s KOSPI is trading 2065.10, down 9.38 or -0.45%.

China’s Shanghai Index is at 2942.84, up 5.48 or +0.19% and Australia’s S&P/ASX 200 is at 6795.60, down 22.40 or -0.33%.

Traders React to Mixed U.S. Earnings Reports

Asian investors are also responding to mixed results from bellwethers Alphabet (Google’s parent) and Amazon.

Shares of Google parent company Alphabet are trading higher in the overnight session after initially rising more than 9% after the company reported second-quarter earnings that beat estimates Thursday. Additionally, Alphabet said its board of directors approved a repurchase of up to an additional $25 billion of its Class C capital stock.

Meanwhile, shares of Amazon dropped over 2% in after-hours trading after reporting mixed results in its second-quarter earnings release on Thursday, failing to meet profit expectations while exceeding revenue forecasts. Investors sold shares as the company gave third-quarter profit guidance that fell well-below street estimates.


Other News

In Asian market news, Hong Kong’s Hang Seng Index was pressured after the international business center reported that it saw its biggest annual drop in exports in almost three and a half years in June.

In Japan, the Nikkei 225 Index was pressured by shares of Nissan Motors, which fell more than 2.5%, after the company announced Thursday it would slash 12,500 jobs worldwide following a 95.5% drop in its first-quarter operating profit.

Also, Japan is preparing for cabinet-approval as early as August 2 to remove South Korea from the so-called white list status with minimum trade restrictions, Kyodo news agency reported on Friday. The plan would come after Japan tightened curbs this month on exports to South Korea of high-tech materials used for making memory chips and display panels.

Finally, North Korea says the two new short-range ballistic missiles it launched Thursday toward the East Sea, also known as the Sea of Japan, were intended to send a warning to South Korea.

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