Asian shares displayed a mixed performance on Thursday, following a significant rate cut by the U.S. Federal Reserve and disappointing earnings from Oracle Corporation, which raised concerns within the technology sector. The Fed’s decision to lower its main interest rate was largely anticipated, but comments from Chair Jerome Powell suggested possibilities for further reductions in 2026, influencing market sentiment.
In Tokyo, the Nikkei 225 index dropped 0.9% to 50,148.82, primarily impacted by a substantial 7.7% decline in shares of SoftBank Group Corp., a key player in the artificial intelligence market. The decline in technology stocks reflects an overarching caution among investors, especially as expectations grow regarding an interest rate hike from the Bank of Japan at its upcoming meeting.
Meanwhile, Hong Kong’s Hang Seng Index lost earlier gains, closing down 0.1% at 25,513.38. The Hong Kong Monetary Authority followed the Fed’s lead by reducing borrowing costs to 4.00%, the lowest level since October 2022. In China, the Shanghai Composite Index fell 0.7% to 3,873.32 amid cautious investor sentiment ahead of China’s upcoming credit data, which is expected to reveal a sharp decrease in new yuan loans for October.
Australia’s S&P/ASX 200 index managed to gain nearly 0.2%, reaching 8,592.00, aided by strength in gold and mining stocks. The country’s unemployment rate remained stable at 4.3% in November, slightly below forecasts of 4.4%. However, South Korea’s Kospi index dipped 0.6% to 4,110.62, with chipmaker SK Hynix falling 3.8% after the main stock exchange issued warnings regarding its rapid stock price increase this year. Taiwan’s Taiex index also closed 1.3% lower, while India’s BSE Sensex rose by 0.4%.
The mixed performance in Asia followed a day of gains on Wall Street, where the S&P 500 increased by 0.7% to 6,886.68, nearing its all-time high. The Dow Jones Industrial Average surged 1% to 48,057.75, and the Nasdaq Composite rose 0.3% to 23,654.16. Wall Street’s positive momentum was bolstered by the Fed’s interest rate cut, which typically stimulates economic growth and enhances investment values, despite concerns regarding potential inflation.
Despite the generally optimistic atmosphere in the U.S. markets, the reaction to Oracle’s earnings report dampened the outlook for technology stocks. The company’s shares plummeted by 11.5% in aftermarket trading following a report that revealed weaker than expected earnings results. Oracle’s aggressive investments in AI are raising alarms about its cash flow sustainability.
“Frankly, the report was not dramatically bad, but it came to confirm concerns around heavy AI spending, financed by debt, with an unknown timeline for revenue generation,”
noted Ipek Ozkardeskaya of Swissquote in a commentary.
As for commodities, U.S. benchmark crude oil prices fell by 31 cents to $58.15 per barrel, while Brent crude, the international standard, decreased by 34 cents to $61.87 per barrel. Currency movements saw the U.S. dollar rising to 156.04 Japanese yen, while the euro slipped to $1.1687.
Overall, Asian markets reflect a cautious approach as investors weigh the implications of U.S. monetary policy alongside concerns from major technology sector earnings reports. The mix of market responses indicates ongoing uncertainty as economic indicators and corporate performances continue to shape the financial landscape.
