Most Asian shares fell on Wednesday as technology-based indexes fell ahead of earnings from market darling Nvidia, while Australian shares fell on weak inflation data.
Ongoing concerns about China also kept sentiment towards Asia on edge, after Canada said it would impose steep trade tariffs on the region’s largest economy.
Regional markets received a moderate signal from Wall Street, with the IBS index hitting record highs. But the IBS was held back by some caution ahead of Nvidia’s earnings announcement. Expectations of lower interest rates also prompted a shift away from the technology sector to more economically sensitive sectors.
U.S. stock index futures fell in Asian trading.
Tech Slumps in Asia, Nvidia Earnings Awaited
Technology-heavy Asian stocks fell sharply on Wednesday, with chipmaker shares swayed ahead of earnings from NVIDIA Corporation (NASDAQ:).
South Korea’s index fell 0.5%, while Japan’s JP225 and Hong Kong’s index lost about 0.3% and 0.8%, respectively.
Attention will focus squarely on whether Nvidia will continue to benefit from strong demand for artificial intelligence — a trend that has seen the stock rise about 160% so far in 2024.
Nvidia is a bellwether for the artificial intelligence industry, and any earnings results from its company, due later Wednesday, are likely to weigh on Asian tech stocks.
Stocks with direct exposure to Nvidia were mixed. Taiwan’s TSMC (TW:) (NYSE:) was flat in Taipei trading, while Japan’s Semiconductor Test Equipment Maker (JSC) fell. Advantest Company (TYO:) rose by about 3%.
South Korean memory chip maker SK Hynix Corporation Semiconductor Manufacturing International Corp (Hong Kong), China’s largest chipmaker and a local rival to Nvidia, fell 0.1%.
Australian shares fall as RBA CPI data fuels interest rate concerns
Australia was among the worst performers in Asia, losing 0.6% after stronger-than-expected July consumer price index data.
Australia’s inflation rate rose to 3.5%, slightly above expectations and well above the Reserve Bank of Australia’s annual target of 2% to 3%. The reading raised concerns that persistent inflation could prompt the RBA to raise interest rates, after policymakers warned of such a scenario earlier in August.
Although the core CPI fell, it remained relatively high.
Broader Asian markets also fell. Chinese stocks and U.S. indices fell 0.7% and 0.3%, respectively, as sentiment toward the country was hurt by Canada’s imposition of heavy trade tariffs on China’s electric vehicle industry.
While the economic impact of the tariffs is expected to be negative, investors fear a renewed trade war between China and the West, given that the United States and the European Union also imposed similar tariffs earlier this year.
Some big Chinese gains are also on the way, with electric carmakers BYD Co (HK:) and Lee Otto Nasdaq (HK:) is scheduled to report later on Wednesday.
India index futures pointed to a quiet opening, with the index facing resistance after crossing 25,000 points.