Asian stocks faced a retreat on Wednesday, mirroring the prior weakness in Wall Street, driven by fluctuating risk sentiment ahead of signals from the Federal Reserve and crucial earnings reports, notably from artificial intelligence giant NVIDIA Corporation (NASDAQ: NVDA).
Despite the overall decline, Chinese markets exhibited extended gains, rebounding further from recent five-year lows.
The People’s Bank of China's larger-than-expected interest rate cut on Tuesday contributed to this recovery.
On Tuesday, Wall Street indexes closed lower, with Asian futures following suit on Wednesday. Heightened uncertainty before chipmaker Nvidia's quarterly earnings prompted significant profit-taking in the technology sector.
S&P 500 Futures and Nasdaq 100 Futures dropped 0.1% and nearly 0.3%, respectively, while Dow Jones Futures decreased by 0.1%. All eyes were on the Federal Reserve's late-January meeting minutes, expected to provide insights into the bank's interest rate plans.
In Asia, Japan’s Nikkei 225 index fell by 0.4%, marking a third consecutive session of losses after reaching 34-year highs earlier this month. Technology stocks, particularly chipmakers, mirrored overnight losses in Nvidia.
Japanese export data for January exceeded expectations, while imports contracted more than anticipated.
Australia’s ASX 200 experienced a 0.8% slide, facing considerable profit-taking after achieving record highs earlier in 2024. Heavyweight mining stocks, including BHP Group Ltd (ASX: BHP), were major drags on the index due to declining commodity prices.
Conversely, National Australia Bank (ASX: NAB) rose 1.1% to a 6-½ year high, buoyed by a stronger quarterly profit.
Futures for India's Nifty 50 index indicated a flat opening.
Chinese stocks displayed positive momentum, with the Shanghai Shenzhen CSI 300 index rising by 0.8% and the Shanghai Composite adding 0.9%, distancing themselves from five-year lows.
Upbeat travel figures during the Lunar New Year holiday, as per official data, heightened optimism for a broader spending recovery in China. Hong Kong’s Hang Seng index surged 1.9%, further boosted by the People’s Bank's interest rate cut.
Ahead of Nvidia's earnings, most major Asian technology stocks mirrored losses in their U.S. counterparts. Investors exercised caution, anticipating fourth-quarter earnings from Nvidia, which could impact optimism surrounding an AI-driven tech boom.
South Korea’s KOSPI declined by 0.3%, primarily driven by losses in heavyweight tech stocks. Nvidia suppliers Advantest Corp. (TYO: 6857) and TSMC (TW: 2330) (NYSE: TSM) fell by 3.3% and 0.9%, respectively.
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