Dhaka:Asian stock markets experienced fluctuations on Thursday following mixed results from major tech firms in the AI sector. Recent optimism was tempered by concerns about companies' investment strategies and rising debt levels.
According to Bangladesh Sangbad Sangstha, the markets had shown strength in the previous two days, buoyed by positive reports from South Korean chipmaker SK hynix and a significant IPO filing from Claude-creator Anthropic. These developments had alleviated investor concerns about the substantial investments in AI and the impact of increased borrowing costs.
However, uncertainty resurfaced as Samsung Electronics announced a third-quarter operating profit of 107.4 trillion won ($80.5 billion), which, despite being a 783 percent year-on-year increase, fell short of estimates. Samsung's profit marked the first time any tech company recorded a quarterly operating profit exceeding 100 trillion won.
The market volatility followed Alphabet's announcement of lower-than-expected profits and a slowdown in its advertising business, leading to a 10 percent drop in after-hours trading. Samsung shares also fell over five percent in Asian trading, reflecting high expectations from traders for company earnings.
Meanwhile, Microsoft surpassed revenue and profit forecasts, driven by its Azure cloud computing division, and Oracle provided a positive revenue outlook. Moody's Ratings issued a warning about the potential challenges posed by the current high-interest rate environment, particularly affecting loans initiated during 2020-22.
In the Asian tech sector, SK hynix shares increased by more than one percent, while Japan's Kioxia and Advantest saw gains, contrasting with declines in Tokyo Electron, SoftBank, and TSMC listed in Taipei. Broader market performance varied, with Japan's Nikkei, Sydney, Singapore, Wellington, and Manila seeing gains, while Seoul, Hong Kong, Shanghai, Taipei, and Jakarta experienced losses.
There was minimal market reaction to the Federal Reserve's decision to maintain interest rates, as the need for more data to combat persistent inflation was emphasized. Oil prices declined after a recent rally, remaining above $100, amid reports of potential US military action in Iran post-midterm elections.
Investors are also monitoring Israel's efforts to form a new government following a tied general election between Prime Minister Benjamin Netanyahu and the opposition, which could influence the future of the Iran conflict.