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Shownotes
Today's biggest winners and losers in the stock market.
On this episode of Stock Movers:
- Tokyo Electron shares rise as much as 4.5%, after the Japanese semiconductor equipment company reported its second quarter earnings results with analysts viewing the WFE outlook positively.
- Declines in heavyweight bank stocks like DBS Group drag Singapore’s benchmark Straits Times Index lower, making it the worst performer in Asia Monday.
- Postal Savings Bank of China shares fall as much as 3.4% in HK after its 3Q results. Analysts say its earnings growth was constrained by rising credit costs and margin pressure in 3Q, despite improved cost efficiency.
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The Stock Movers Report. Your roundup of companies making moves in the stock market. Harnessing the power of Bloomberg data.
Now, let's have a look at some of the stocks on the move today in Asia. I'm Caroline Hepkin. I'm joined by our markets reporter, Anthony Stephens. Good to speak to you, Anthony. Talk to us about the rebound today in markets where you are. There was a really big bump on Friday.
Yeah, we got hit quite hard on the futures on the Friday night. And, you know, everybody was bracing for a pretty bad morning this morning. We opened down 3% on the cost and have spent the entire day ripping higher for a couple of reasons. First is earnings out of our time zone, actually not that bad. We have pretty good earnings from Tokyo Electron. That followed on from pretty decent earnings from Hynix last week. So there are some investors latching on to the fact that quality of earnings in Asia is is much better than in the US where there's a lot more volatility and positioning is a lot lighter. Remember that the Asian tech stocks have been falling for quite some time now, especially in Korea
and in China. And it's those two markets that are leading the way higher. Another factor that's playing into it is government support. So governments are a lot more supportive in Korea. There's a new data center being planned by the Korean Investment Corporation with SoftBank. And in China, the markets are being supported by speculation the government is going to instituted a range of stock support measures. They've announced a meeting today. So, that support contrasts with the pickup in volatility in the U.S. as we approach the midterms. So, there is money flowing back to Asia where the earnings visibility is stronger and the government support for data centers and the AI trade is much more obvious.
Yeah, absolutely. Talk to us a bit more about the tech earnings in particular. What has surprised to the upside?
To the upside, we had surprises from Tokyo Electron and MediaTek, and to a lesser extent, Yangtze Optical. That stock, Yangtze Optical, that last one, is up 11%, just highlighting how badly Chinese tech stocks have been hit, and any tiny surprise to the upside will see a huge move higher. We are also seeing downside from the likes of Keoxia and Screen, two pretty shocking earnings, especially with very conservative guidance around the difficulty of production. And that's kind of hurt the Japanese ecosystem. Most recently, they've had some very conservative guidance in terms of how much they can ramp up production. So, it's not been all roses, but the winners have certainly outweighed the losers today.
Yeah.
Okay. Then the U.S. midterms. Gosh, it's sort of faster than we had maybe thought. But the midterm elections are here. How are they affecting the tech trade and just stocks more broadly, do you think?
Yeah, so there's a lot of positioning reports. So Morgan Stanley basically said that any dip post the midterm should be bought, given that the plays on data center concern has been kind of overdone. We do see an interesting move lower in oil here as we enter the midterms with frantic diplomacy between Iran and the US. Obviously, that's going to be a focus for any kind of blue wave as well. And that risk triggering a rotational dynamic, right, where The AI trade is out of favor with the Democrats, but a lower oil price probably helps the consumer names.
So that's in the US and that'll probably be mirrored in Asia. One thing that we have to keep in mind is a lot of countries in Asia are touched by the midterms. So you have India with the visas, you have China with trade. You have the security arrangements with Japan and Korea and in Taiwan, for that matter.
And then ASEAN, you know, on a security basis with the US. So there's a lot of moving parts coming into the Wednesday. But for now, people are just taking down risk across the board. You see that across many touch points. The year's outperformers are selling off very badly today out of the blue. So Singaporean banks, DBS, OCBC and the like are down 3%. The Chinese banks are down 3% to 4% despite excellent earnings. So CCB, Bank of China, ICBC. So people are really selling the longs that have worked and covered the shorts that are not.
The Stock Movers Report from Bloomberg Radio. Check back with us throughout the day for the latest roundup of companies making news on Wall Street. And for the latest market moving headlines, listen to Bloomberg Radio live. Catch us on YouTube, Bloomberg.com and on Apple CarPlay and Android Auto with the Bloomberg Business app.
