Asian share markets opened cautiously on Monday as investors prepared for the upcoming earnings season. South Korean stocks fell 2.2%, while Taiwan's shares eased 0.5%. The MSCI index of Asia-Pacific shares excluding Japan dipped 0.3%. Chinese blue chips managed a slight gain of 0.1%.
Key Details
Oil prices also experienced volatility. Brent crude futures fell 1.6% to $103.01 a barrel, down from a recent peak of $109.97. U.S. crude futures dropped 1.9% to $90.11 a barrel. This decline followed reports of strikes affecting shipping and airports in the Gulf region.
Background
Trade was thin, with Japanese markets closed and the U.S. on a partial holiday ahead of earnings announcements. Major U.S. banks are set to kick off earnings reports on Tuesday. Analysts expect S&P 500 earnings to have surged over 30% in the third quarter, largely driven by the technology sector, according to LSEG IBES. My Bui, an economist at AMP, noted that gains in the S&P 500 since mid-September have been concentrated in tech stocks. Investors are demanding higher yields to support substantial borrowing for artificial intelligence initiatives.
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The declines in Asian stocks and oil prices may impact sectors sensitive to energy costs and tech valuations. Investors are likely to monitor how upcoming earnings reports will influence market sentiment and valuations.
Watch for the earnings reports from major U.S. banks scheduled for Tuesday, which could set the tone for the rest of the earnings season.
Based on reporting by: moneycontrol.com, businesstimes.com.sg