Global stocks edged lower on Friday after disappointing tech earnings sapped risk appetite, with investors focusing on concerns over economic growth and an action-packed week of central bank interest rate decisions. The MSCI World index of global shares (.MIWO00000PUS), which has risen more than 16% this year, was flat, and Germany’s tech-heavy Dax slipped 0.3%.
Investors reacted to weaker-than-expected results from Tesla, Netflix, and a host of other smaller companies, with some forecasting further softening in profit margins for 2023 and even a decline in revenue. The FANG+ index of technology giants fell 4%, its worst day since March 2020, and was on track for its second-biggest annual loss since the coronavirus pandemic began in late 2018.
Japan’s Nikkei ended down 0.3%, with autos and oil stocks among those weighing on the market after data showed that household appliance sales fell 5.8% in January from a year earlier. Software maker SAP’s gloomy forecast also weighed on European technology stocks, with its shares falling 0.8%. Other top losers included troubled British engineer GKN, which slumped 7.9% after announcing a further write-off.
On the currency front, the dollar soared against the yen after a report that the Bank of Japan is leaning towards keeping its yield curve control policy in place next week. The policy is designed to encourage yen weakness and kickstart inflation by locking Japanese bond yields at near-zero levels.
In early Asian trading, the Australian dollar was stronger after data showed that retail sales rose 0.6% in February from a year earlier. The rise, fueled by higher petrol prices and food sales, lifted the Aussie to its highest in almost a month against the greenback at $0.7215.
The euro held firm against the dollar after data showed that German industrial orders unexpectedly fell in February. The euro recovered from Thursday’s losses after a fresh hawkish tone from the European Central Bank. Eurozone consumer confidence in March also climbed, helping to keep the euro at a four-month high against the dollar.
The pan-European STOXX 600.STOXXE was flat, with gains in cyclical sectors balancing the sluggish tech sector. Germany’s DAX index was bolstered by a 2% rise in shares of electronics maker Electrolux, helped by its plan to seek a primary listing in Hong Kong, allowing investors from China to buy the company’s shares. But shares in electronics component maker TSMC sank 3.3% after the world’s largest chipmaker reported a fall in forecast profit and revenue. The index was still up 1.3% for the week. The FTSE 100 in Britain was flat.
