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  1. Asia slips after tech stocks weigh on Wall Street, dollar rebounds

Asia slips after tech stocks weigh on Wall Street, dollar rebounds

Tokyo's Nikkei rose 0.4 percent on a weaker yen, while Australian shares were flat 0.2 percent.

By: | Tokyo | Updated: July 23, 2015 7:55 AM
stock market

Tokyo’s Nikkei rose 0.4 percent on a weaker yen, while Australian shares were flat 0.2 percent. (Reuters)

Asian shares slipped early on Thursday after disappointing earnings from tech giants weighed on Wall Street, while the dollar rebounded on the back of upbeat U.S. economic data.

MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent.

Tokyo’s Nikkei rose 0.4 percent on a weaker yen, while Australian shares were flat 0.2 percent.

The Dow shed 0.4 percent and Nasdaq lost 0.7 percent overnight after poor results from tech sector leaders like Apple.

Shares of Apple, the world’s biggest publicly-traded company, posted their biggest percentage drop overnight since January 2014 a day after the iPhone maker’s revenue forecast for the fourth quarter fell below expectations. Microsoft also slumped after reporting its biggest-ever quarterly loss.

In currencies, the dollar nudged up 0.1 percent to 124.04 yen after rebounding overnight from a low of 123.27 thanks to a rise in U.S. home sales to a 8-1/2 year peak. The euro was little changed at $1.0926 after coming off an overnight peak of $1.0966.

Weaker commodity prices also supported a mild rebound in the dollar. Brent crude prices lost 1.6 percent on Wednesday after data showed U.S. crude inventories rose last week, while spot gold slid to a five-year low on the dollar’s bounce.

“Sentiment towards commodities as a whole has been plummeting as the Fed lift-off timeline narrows and the drive to the dollar returns after six weeks of macro turmoil,” Evan Lucas, market strategist at IG in Melbourne, wrote.

The Greek debt crisis has gone on the back burner for the time being after Athens reached an agreement with its European creditors earlier this month, allowing market focus to shift back towards divergences in monetary policies between countries.

The drop in commodity prices has not been kind to commodity currencies such as the Canadian dollar, which retreated overnight to a six-year low of C$1.3053 against the U.S. dollar.

The Canadian dollar and other commodity currencies could weaken even more if the U.S. Federal Reserve begins hiking interest rates as early as September.

The New Zealand dollar, which also probed multi-year lows recently against the U.S. currency, fared a little better after the Reserve Bank of New Zealand delivered a smaller interest rate cut than some in the market expected and softened its rhetoric on the kiwi following its recent, dramatic fall.

The kiwi went as high as $0.6654 to put some distance between a six-year trough of $0.6498 hit last week.

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