Asia shares extend slump after tech giants Amazon and Alphabet disappoint; STI down 1.6%

Amazon reported that its quarterly net sales rose to US$56.58 billion from US$43.74 billion a year earlier. That missed analyst estimates of US$57.1 billion.
Amazon reported that its quarterly net sales rose to US$56.58 billion from US$43.74 billion a year earlier. That missed analyst estimates of US$57.1 billion.PHOTO: AFP

SYDNEY (BLOOMBERG, REUTERS) - Asian stocks extended declines on Friday (Oct 26) at the end of a torrid week that dragged the region's equities deeper into a bear market. US stock futures fell after disappointing reports from technology bellwethers.

Japanese shares reversed early gains, on track for a slide of more than 5 per cent this week. Equities in Hong Kong and Australia edged lower, while losses were greatest in South Korea. China's Shanghai Composite fluctuated.

Japan's Topix index dropped 0.8 per cent as of 12.25pm in Tokyo. The Shanghai Composite was down 0.6 per cent while Hong Kong's Hang Seng tumbled 1.4 per cent. Australia's S&P/ASX 200 Index dropped 0.7 per cent while South Korea's Kospi index lost 1.5 per cent.

Singapore's Straits Times Index lost 49.66 points, or 1.6 per cent, to 2,963.18 as at 1pm.

Futures on the S&P 500 and the Nasdaq 100 each fell at least 1 per cent.

The decline in US futures showed any optimism for technology firms from Thursday's session was quickly dented after Amazon and Google parent Alphabet results. The S&P 500 Index had risen for the first time in seven days on earnings from Twitter, Microsoft and Tesla. The offshore yuan extended this week's slide to trade at the lowest since January 2017.

After trading closed in New Yprk on Thursday, Amazon tanked 8 per cent. The fall came after the online retailer and cloud computing heavyweight reported that its quarterly net sales rose to US$56.58 billion from US$43.74 billion a year earlier. That missed analyst estimates of US$57.1 billion, according to Refinitiv data.

Alphabet missed analysts' estimates for third-quarter revenue, while rising expenses trimmed its operating margin for the third straight quarter, fanning concerns about regulatory scrutiny. Its stock fell 4.7 per cent.

Sentiment remains fragile after more than US$6.7 trillion was lost from the value of global equities since late September as lofty expectations for earnings were tested amid heightened trade tensions and tightening financial conditions.

Investors remain apprehensive as a flood of earnings, while mostly stellar, have come with warnings about the future impact of tariffs and rising costs.

Amid discussion of whether the Federal Reserve would slowdown its tightening path, vice-chair Richard Clarida backed further gradual rate hikes while delivering an upbeat assessment of the economy in his maiden speech. The central bank is "as near as it has been in a decade" to meeting its twin goals of full employment and price stability, he said.

In Europe, the euro retained declines in the wake of European Central Bank President Mario Draghi downplaying the recent slowdown in economic momentum and Italian fiscal risks, reiterating that growth is returning to potential. The ECB kept its target rate unchanged at zero.