Asian stocks were mixed Tuesday after Wall Street edged higher as investors awaited U.S. earnings reports and an update on economic growth.
Shanghai and Hong Kong declined, while Tokyo advanced. Oil prices were little-changed.
Wall Street's benchmark S&P 500 index gained 0.1 per cent on Monday after Coca-Cola Co. announced better quarterly profits than expected. Some 170 of the biggest U.S. companies are due to report earnings this week.
Also this week, U.S. government data are expected to show economic growth is slowing following repeated interest rate hikes to cool stubbornly high inflation.
If the economy cools, tech stocks will face a “difficult environment” maintaining high prices that have helped to buoy the market, said Edward Moya of Oanda in a report. He said stocks also face "big risks” from corporate earnings and a battle in Washington over raising the government's debt limit.
Global markets
The Shanghai Composite Index lost 0.6 per cent to 3,256.82 while the Nikkei 225 in Tokyo advanced 0.4 per cent to 28,706.04. The Hang Seng in Hong Kong sank 1.6 per cent to 19,643.00.
The Kospi in Seoul tumbled 1.6 per cent to 2,482.50 after South Korea reported unexpectedly strong economic growth in the first quarter, avoiding a technical recession. Korean economic activity expanded by 0.3 per cent over the previous three-month period, rebounding from a 0.4 per cent contraction.
Singapore and Bangkok declined. New Zealand and Australian markets were closed for a holiday. In India, Sensex opened in the negative territory.
On Wall Street, the S&P 500 advanced to 4,137.04. The Dow Jones Industrial Average rose 0.2 per cent to 33,875.40, while the Nasdaq composite slipped 0.3 per cent, to 12,037.20.
Analysts expect companies in the S&P 500 to report their worst drop in earnings since the spring of 2020, when the pandemic paralysed the economy.
Company stocks
Microsoft is due to report earnings Tuesday and Amazon on Thursday. Microsoft fell 1.4 per cent and Amazon dipped 0.7 per cent.
The majority of companies so far this earnings reporting season have been beating forecasts.
Wall Street is also waiting for the first estimate of how quickly the U.S. economy grew in the first three months of the year. Economists expect growth to slow to 1.9 per cent at an annual rate, down from 2.6 per cent in the final quarter of 2022.
Higher rates have already slowed U.S. housing sales by making mortgages more expensive. Manufacturing and other areas of the economy have also shown pain, while the job market has stayed resilient.
The Federal Reserve meets next week. Much of Wall Street expects the U.S. central bank to raise interest rates at least one more time, before likely taking a pause. Many traders are betting the Fed will have to cut rates later this year in order to prop up the economy. But Fed officials have insisted they will keep rates high at least through the end of this year.
Energy markets
In energy markets, benchmark U.S. crude gained 4 cents to $78.80 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 89 cents on Monday to $78.76. Brent crude, the price basis for international oil trading, added 3 cents to $82.57 per barrel in London. It advanced $1.07 the previous session to $82.73.
The dollar rose to ¥134.37 from Monday's ¥134.27. The euro gained to $1.1055 from $1.1046. The rupee opened at 81.95 against the dollar.