Markets

Nikkei Dips on Tech Worries, Hang Seng Enjoys Stimulus Boost

 

Asia’s share indexes were largely subdued on Wednesday ahead of key financial results from US chip leader Nvidia which could either lift or deter tech investors.

Traders are anxious to see if Nvidia’s numbers will justify the AI euphoria that has gripped global share markets recently, though there was some optimism in China as markets there welcomed Beijing’s latest efforts to revitalise its economy.

Japan’s benchmark stock index edged down for a second day, however, teetering below an all-time high.

The Nikkei share average was down 0.26%, or 101.45 points, to close at 38,262.16, while the broader Topix was off 0.19%, or 5.00 points, to 2,627.30.

 

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Over the past week or so, the benchmark gauge has been edging closer to the lifetime record of 38,957.44 set on the final trading day of 1989 at the peak of Japan’s bubble economy. On Friday, the benchmark index pushed as high as 38,865.06 before pulling back into the close.

The Nikkei’s momentum towards the 35-year record has been stalled by Wall Street, which closed lower overnight after returning from a holiday on Monday, as investors worried whether Nvidia’s quarterly results will justify its expensive valuation. 

The broader Philadelphia semiconductor index declined over 1% as Nvidia and other chip stocks stumbled.

Nikkei’s tech-related shares sagged, with chip-testing equipment maker Advantest, which counts Nvidia among its customers, down 1.98%. Chip-making equipment giant Tokyo Electron fell 0.38%.

But China stocks rose for a seventh straight session, while Hong Kong stocks advanced on gains in tech and financials as investors cheered policymakers’ efforts to boost market confidence.

China introduced a raft of measures after the Lunar Chinese New Year holiday to boost market sentiment and prop up the economy, including the central bank announcing a larger-than-expected benchmark mortgage rate cut in response to weak housing demand.

The blue-chip CSI 300 Index gained 1.35%, while the Shanghai Composite Index rose 0.97%, or 28.23 points, to 2,950.96. The Shenzhen Composite Index on China’s second exchange edged up 1.03%, or 16.55 points, to 1,629.01.

Automobile and real estate companies led the gains, adding 3.3% and 2.6%, respectively.

 

Sticky US Inflation

Meanwhile, Hong Kong’s Hang Seng Index had surged 3% to hit a seven-week high before ending up 1.57%, or 255.59 points, at 16,503.10. The Hang Seng China Enterprises Index gained 2.24%.

Elsewhere across the region, Sydney, Seoul, Mumbai, Taipei, Singapore, Jakarta and Kuala Lumpur were all down. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.62%.

European bourses were set for a subdued start, with Eurostoxx 50 futures up 0.02%, German DAX futures down 0.04% and FTSE futures 0.14% lower.

On the monetary policy front, traders will get a chance to assess minutes of the Federal Reserve’s last meeting later in the day for any further clues on when the US central bank will start its easing cycle.

Data last week showed sticky US inflation, prompting investors to push back expectations of an early start to the rate-cut cycle. Markets are now pricing in June as the starting point for easing, compared with March at the start of the year.

The changing rates outlook has buoyed the dollar this year and kept the yen, which is extremely sensitive to US rates, near a three-month low.

The yen was at 149.95 per dollar, anchored to the key 150 level for the past few days, keeping traders on the watch for intervention from Japanese officials.

Against a basket of currencies, the dollar index eased 0.067% to 103.97, inching away from the three-month high of 104.97 it touched last week.

In commodities, US crude rose 0.43% to $77.37 per barrel and Brent was at $82.72, up 0.46% on the day.

 

Key figures

Tokyo – Nikkei 225 < DOWN 0.26% at 38,262.16 (close)

Hong Kong – Hang Seng Index > UP 1.57% at 16,503.10 (close)

Shanghai – Composite > UP 0.97% at 2,950.96 (close)

London – FTSE 100 < DOWN 0.77% at 7,659.85 (0935 GMT)

New York – Dow < DOWN 0.17% at 38,563.80 (Tuesday close)

 

  • Reuters with additional editing by Sean O’Meara

 

Read more:

China Banks Approve $17bn For Housing as Policy Debate Rages

China Chops Mortgage Benchmark Rate to Boost Property Market

China’s Financial Watchdogs Vow to Maintain Strict Supervision

Hang Seng Lifted by Rate Cut, Nikkei Dips on Tech Worries

 

 

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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