Asia Shares Fall as Alphabet Slides 10 Percent and Samsung Drops

Asian shares gave up their early gains on Thursday as two American tech results pulled the region in opposite directions. Alphabet fell 10 percent in after hours trading in New York, wiping nearly 400 billion dollars off its market value, after investors focused on its heavy cash burn. Microsoft rose 3 percent after hours after beating forecasts with stronger cash flow than expected. Nasdaq futures fell 1 percent.

The split set the tone across the region. MSCI's broadest index of Asia Pacific shares outside Japan dropped 0.7 percent. Japan's Nikkei trimmed its gains to 0.3 percent. Mainland China's blue chip index fell 0.9 percent, and Hong Kong's Hang Seng rose 0.2 percent, Reuters reported from Sydney.

Samsung's record profit was not enough

South Korea took the sharpest fall. Samsung Electronics said its third quarter operating profit rose nearly ninefold to a record high, driven by strong demand for AI chips, with revenue of 195.3 trillion won and operating profit of 107.4 trillion won. Its shares still slid more than 4 percent, and the broader KOSPI index fell 2.6 percent a day after surging nearly 7 percent. A separate Seoul reading later in the morning put Samsung down more than 6 percent.

Jamie Hannah, deputy head of investments at VanEck, told Reuters that Alphabet fell because its traditional advertising business is being affected by the very AI boom the company is spending to lead, while both Alphabet and Microsoft confirmed that AI revenue itself is still solid, through data center growth and cloud services.

Rates and commodities in the background

Overnight, the Federal Reserve held interest rates steady, with two committee members voting for a hike. Chair Kevin Warsh struck a more confident note on inflation at his press conference, and Treasuries rallied. In Hong Kong, the monetary authority held its base rate at 4.25 percent, following the Fed under the city's currency peg.

Gold held above 4,000 dollars an ounce. Oil stayed high and then eased in Asian trade, with Brent crude around 113 dollars a barrel in early trading, as traders weighed a possible new American push for talks with Iran against the risk of renewed strikes after the United States midterm elections.

In Mumbai, the Sensex rose about 520 points in morning trade and the Nifty traded near 22,850, according to The Hindu BusinessLine's live market coverage, helped by the Fed hold.

What traders watch next

The next test comes later on Thursday, when Amazon and Intel report in the United States. After Alphabet, investors will read those results for the same two things: whether AI spending is still growing, and whether the cash to pay for it is keeping up.