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US tech shares surge on Meta, Microsoft ( MSFT ) earnings

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BOJ decision, Ueda comments in focus

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Dollar holds gains after Fed announcement

By Gregor Stuart Hunter

SINGAPORE, July 31 (Reuters) - Asian equities slipped on

Thursday after weaker-than-expected Chinese activity data and a

plunge in copper prices, while investors weighed a trade deal

between South Korea and the U.S.

The dollar held near a two-month high as investors weighed a

Federal Reserve decision to hold rates steady and strong

earnings from megacap tech firms.

Nasdaq futures surged 1.2% higher after

better-than-expected earnings from Microsoft ( MSFT ) and Meta

Platforms ( META ). S&P 500 futures advanced 0.8%, while

the U.S. dollar held steady after hitting a two-month high.

Both companies' earnings reports "have shot the lights out",

reporting higher revenue from cloud computing and AI-enabled ad

targeting respectively, said Tony Sycamore, a market analyst at

IG in Sydney.

MSCI's broadest index of Asia-Pacific shares outside Japan

eased 0.7%, though still on track for its fourth

consecutive monthly gain in July.

Stocks in Hong Kong and China led declines after official

PMI gauges showed weaker-than-expected economic activity during

July.

Markets are now awaiting the Bank of Japan's monthly policy

decision later in the day, with traders looking for any hints

that Governor Kazuo Ueda may offer on the likelihood of another

rate hike this year.

The Federal Reserve's rate-setting committee voted 9-2 on

Wednesday to hold interest rates steady for the fifth

consecutive meeting, with two Fed governors dissenting for the

first time in more than three decades.

Fed Chair Jerome Powell's comments after the decision

undercut confidence that borrowing costs would begin to fall in

September.

"It will take the next two months of data to convince Fed

officials that tariff effects will only lead to modest, one-time

price increases and that policy rates should head toward

neutral," analysts from Citi said in a note.

The dollar index was at 98.812, just shy of the two

month high of 99.987 it touched on Wednesday. The index is set

to clock a 3.1% gain for the month, its first in 2025.

"Although the Federal Reserve decided to keep rates steady

at its recent rate setting decision, the chance of rate cuts at

upcoming meetings remain live as they balance softening economic

data with the potential for persistent inflation," said Manusha

Samaraweera, fixed income investment director at Capital Group.

U.S. gross domestic product growth rebounded more than

expected in the second quarter, but the details of the report

painted a picture of an economy that was losing steam plagued by

uncertainty from Trump's protectionist trade policy.

The Korean won appreciated 0.3% after Trump said

the U.S. will charge a 15% tariff on imports from South Korea,

which will in return invest $350 billion in U.S. projects and

purchase $100 billion in U.S. energy products.

The announcement is the latest in a series of trade policy

deals rushed out before an August 1 deadline to avert the

imposition of the April 2 "Liberation Day" tariffs. These deals

continue to cast a shadow on global markets.

Copper futures plunged 19.4% after Trump said the

U.S. will impose a 50% tariff on copper pipes and wiring, as the

details of the levy fell short of the sweeping restrictions

expected and left out copper input materials such as ores,

concentrates and cathodes.

Trump said on Wednesday negotiations on trade with India are

still under way after announcing earlier the U.S. will impose a

25% tariff on goods imported from the country.

Meanwhile, the U.S. will also suspend its "de minimis"

exemption that allowed low-value commercial shipments to be

shipped to the United States without facing tariffs. The tax

break is a mainstay of China's low-cost e-commerce platforms

such as Shein and PDD's Temu.

In commodities, oil prices rose for a fourth straight day on

Thursday, as investors worried about supply shortages amid

Trump's push for a swift resolution to the war in Ukraine and

threats of tariffs on countries buying Russian oil.

Brent crude futures for September delivery, which

are set to expire on Thursday, rose 0.33%, to $73.48 a barrel,

while U.S. West Texas Intermediate crude for September

gained 0.21% to $70.15 a barrel.