Asian shares showed mixed performance because of Wall Street’s excitement over Artificial Intelligence. U.S. stocks rose to their highest level in 15 months with the sturdy profit report earned by the financial companies. However, the property shares of Shanghai and Hong Kong were impacted severely by the troubled Chinese developer and his increasing total debts on China Evergrande.
Overall status of the Stock market on Wednesday
Hang Seng index of Hong Kong reduced 1.2% to 18,782.40, while the Shanghai composite index dropped 0.3% to 3,189.81. The important growth driver of China is the property market. It experienced a fall due to the regulators tightening the lending regulations to check out the debt issues in the industry.
In Japan, the Nikkei 225 rose 0.8% to reach 32, 759.60, while the S&P/ASX 200 of Australia increased 0.6% to 7,324.00. Meanwhile, Seoul’s Kospi experienced a littles loss of 0.1% to reach 2,604.12. Whereas Bangkok and India experienced growth in their respective markets.
Reason behind the U.S. recording high
The main reason for the hike in U.S. stocks is the prospect of Artificial intelligence driving profitable growth and showing the potential revolution of the global economy. Microsoft shares rose 4% as it played a significant role by announcing a $30 charge for the per-month usage of the Copilot service. Analysts expected this rise as a result of the strategic move of the company.
Another significant reason for the rise is the contribution of the financial industry. Charles Schwab rose 12.6% in revenue of spring exceeding the expectation of analysts along with Bank of America and Morgan Stanley.
Not all the U.S. market has a rise
Not all U.S. companies raised the value of their stocks in the reporting season. Masimo, a medical equipment manufacturer, also runs a consumer audio business under Denon, and Bowers & Wilkins brands experienced a 20% drop. They stated that the decreased number of patients in the U.S. hospital is the reason for this fall.
Predicting the actions of the Federal Reserve
Even though, the market showed mixed feelings about the U.S. economy. The traders are closely watching the actions of the Federal Reserve, specifically its interest rate decisions. The report on sales at U.S. retailers indicated that the sale dropped lesser than expected while the report on industrial production highlighted a contraction. This varying point convinces investors to believe that the Federal Reserve might increase the federal fund rates in the upcoming meeting. It will be the highest level since 2001 if the rate hike occurs, indicating a crucial high from the last year that recorded low.
The rising interest rates have impacts on inflation and the overall economy. The economic growth might slow down by the raising stock rates, and it might put pressure on the stocks and other investments to move down. Amid all these, there are even hopes for inflation to cool down which will lead the Federal Reserve to stop hiking interest rates now and for the next year.
Crude, the benchmark of the U.S. dropped 29 cents to $75.37 a barrel in international trading while the basis of international trading, the Bent Crude fell 19 cents to $79.44 a barrel. The U.S dollar reached 139.39 yen from 1388.83 strengthening its dollar against Japan Yen. The Euro fell to $1.1222 from $1.1230
With the advent of reporting season of Wall Street, Analysts, and investors are paying extreme attention to corporate earnings and economic indicators to improve the overall health of the global economy along with its direction. The whole economy waits for the Federal Reserve meeting, anticipating their decision on interest rates, and the impact that it will have on the financial landscape.