Asian markets start earnings and interest rate week under selling pressure

Down 0.2%, the MSCI Asia Pacific index pulled the Asian session into the red ahead of selling pressure in tech stocks and interest rate decisions. Risk appetite in Asia remained weak after semiconductor stocks on Wall Street logged their longest losing streak since November. US index futures, meanwhile, are trading flat.

How will the earnings wave affect artificial intelligence stocks?

With 550 companies set to report earnings, technology manufacturers are under scrutiny in the Asian session. While South Korean chipmakers SK Hynix and Samsung Electronics sit at the center of pricing, Goldman Sachs lowered its 12-month target for South Korea's Kospi index by 25%, citing question marks over the sustainability of artificial intelligence spending. On the global front, earnings from Microsoft, Alphabet and Amazon will test the profitability of billions of dollars in infrastructure investments.

How are central banks and oil prices driving the market?

Dropping to $115.60, the barrel price of Brent crude retreated approximately 1% from a 6-month peak, providing short-term relief in energy costs. The geopolitical risk premium, however, remains intact. While US President Donald Trump signaled that military action against Iran could return to the agenda following the November 3 midterm elections, threats by the Houthis against regional energy and transport routes are being monitored on market desks.

3 major central banks will also set their interest rate paths this week. Amid persistent consumer price inflation (CPI) pressures, decisions from the Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of Japan will be decisive for companies' borrowing costs and equity valuations.

This content is for information purposes only and does not constitute investment advice.