Asian shares shrug off Wall St blues as China leaves rate unchanged

A person walks in front of an electronic stock board showing Japan’s Nikkei 225 index at a securities firm Monday, April 22, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

Markets in Asia apart from Shanghai’s were broadly higher Monday, shrugging off the blues on Wall Street after big technology stocks logged their worst week since the COVID crash in 2020.

Oil prices fell while U.S. futures advanced.

Hong Kong’s Hang Seng led the region, gaining 1.6 percent to 16489.08. But the Shanghai Composite index shed 0.5 percent to 3,050.89 after the People’s Bank of China kept its 1-year and 5-year loan prime rates unchanged.

Tokyo’s Nikkei 225 added 0.4 percent to 37,219.47 and the yen weakened further. The U.S. dollar rose to 154.69 yen from 154.59 yen, trading at levels not seen since 1990.

The Kospi in South Korea jumped 0.8 percent to 2,613.61.

Australia’s S&P/ASX 200 surged 1 percent to 7,640.30.

On Friday, the S&P 500 dropped 0.9 percent to close out its third straight losing week. It ended at 4,967.23, which is 5.5 percent below its record set late last month.

READ: Tumbling tech stocks drag Wall St to another losing week

That’s its longest such streak since September before it broke into a romp that sent it to a string of records this year.

The Dow Jones Industrial Average rose 0.6 percent to 37,986.40, and the Nasdaq composite fell 2 percent to 15,282.01.

The market’s worst performers included several stocks that had been its biggest stars. Super Micro Computer lost more than a fifth of its value, dropping 23.1 percent. The company, which sells server and storage systems used in AI and other computing, had soared nearly 227 percent for the year coming into the day.

Nvidia, another stock that has surged to dizzying heights due to Wall Street’s frenzy around artificial intelligence technology, also gave up some of its big recent gains. It slumped 10 percent and was the heaviest single weight on the S&P 500, by far, because of its huge size.

Tech stocks in the S&P 500 broadly lost 7.3 percent this week for their worst performance since March 2020 as some global giants reported discouraging trends. ASML, a Dutch company that’s a major supplier to the semiconductor industry, reported weaker-than-expected orders for the start of 2024, for example.

The larger threat was a dawning, dispiriting acknowledgment sweeping Wall Street that interest rates may likely stay high for longer.

Fed to keep rates unchanged

Top Fed officials said this week that they could hold interest rates at their high level for a while. That’s a letdown for traders after the Fed had signaled earlier that three cuts to interest rates could be possible this year.

High rates hurt prices for all kinds of investments. Some of the hardest hit tend to be those seen as the most expensive and which make investors wait the longest for big growth, which can make tech stocks vulnerable.

READ: When will the US Fed cut rates? Maybe later or not at all

Fed officials are adamant that they want to see additional proof inflation is heading down toward their 2 percent target before lowering the Fed’s main interest rate, which is at its highest level since 2001.

Because interest rates look unlikely to offer much help in the near term, companies are under even more pressure to deliver growth in profits.

Netflix sank 9.1 percent despite reporting stronger profits for the latest quarter than expected. Analysts called it a mostly solid performance, but the streaming giant disappointed some investors by saying it will stop giving updates on its subscriber numbers every three months, beginning next year.

Helping to limit the market’s losses was American Express, which rose 6.2 percent. It reported stronger profit for the latest quarter than analysts expected. Fifth Third Bancorp rose 5.9 percent after it likewise topped expectations.

In the oil market, U.S. benchmark crude oil shed 68 cents to $81.54 per barrel in electronic trading on the New York Mercantile Exchange. It gained 12 cents on Friday, to $82.22 per barrel.

A barrel of Brent crude gave up 72 cents to $86.57 per barrel.

On Friday, it pulled back to $87.29 after briefly leaping above $90 overnight on worries about fighting in the Middle East. Iranian troops fired air defenses at a major air base and a nuclear site during an apparent Israeli drone attack, raising worries in the market. But crude prices pared their gains as traders questioned how Iran would respond.