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Asia Stocks Drop Microsofts Brisk Data Boost Tech Optimism

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Asian equities slipped on Wednesday as investors looked to the Federal Reserves guidance on its monetary policy while futures for U.S. tech shares jumped after strong earnings from Microsoft.

European stocks are expected to slip a tad, with EuroStoxx 50 futures down 0.3 and FTSE futures shedding 0.4.

MSCIs gauge of Asian exJapan shares slipped 0.2, dragged lower by profittaking in resource shares as some investors have grown wary of stretched valuations.

The global economy appears to be losing momentum a bit and there is no clear sign yet that COVID19 infections are slowing even after vaccinations have started in some places. I expect shares to get stuck in a range for a while, said Hisashi Iwama, senior portfolio manager at Asset Management One.

But the tech sector remained a bright spot after Microsofts earnings lifted Nasdaq futures 0.5 while Japans Nikkei also rose 0.3.

Microsoft shares rose 3.7 in extended trading after its Azure cloud computing services grew 50, boosting optimism for other U.S. tech giants, including Apple and Facebook, which announce quarterly results later in the day.

Microsofts earnings were superb, even compared with strong market expectations, said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Those tech firm shares have been in a bit of the doldrums since August but they are likely to lead the market again, given their solid outlook, he said.

At their peak in August, the combined market…

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