Tech-heavy Asian bourses were the worst performers for the day, with South Korea’s KOSPI, Hong Kong’s Hang Seng and the Taiwan Weighted index stumbling nearly 0.8% each
Asian stocks dropped on Thursday, pressured chiefly by losses in the technology sector following underwhelming guidance from AI company Nvidia, although expectations of lower interest rates helped limit overall losses.
Declines in the tech sector were also relatively muted, given that NVIDIA Corporation still beat expectations with its quarterly earnings. Analysts were seen maintaining a bullish stance on the company.
Asia markets took a weak lead-in from Wall Street, with U.S. stock index futures declining in Asian trade as concerns over Nvidia impacted the technology sector. The Dow Jones Industrial Average (DJIA) and the S&P 500 were also nursing a fall from record peaks.
Tech-heavy Asian bourses were the worst performers for the day, with South Korea’s KOSPI, Hong Kong’s Hang Seng and the Taiwan Weighted index stumbling nearly 0.8% each.
Losses in tech also pulled Japan’s Nikkei 225 down 0.2%, while the TOPIX skidded 0.3%.
Tech losses were weighted largely towards chipmakers, especially those with direct exposure to Nvidia- which declined 8.5% in aftermarket trade.
Taiwan’s TSMC tumbled 2%, while Hon Hai Precision Industry Co Ltd, also known as Foxconn, declined 1.6%.
Memory chip maker and key Nvidia supplier SK Hynix Inc stumbled 6%, while bigger rival Samsung declined 3%.
In Japan, chip testing equipment maker Advantest stumbled 0.5%, while Tokyo Electron dropped 1.1%.
Semiconductor Manufacturing International Corp – the biggest chipmaker in China and a rival for Nvidia, declined marginally.
Wider technology stocks also declined, as Nvidia’s earnings spurred some concerns that the so-called “AI trade” that had underpinned the sector over the last year was now losing more steam.
Losses in tech also came amid a wider pivot out of the sector and into more economically sensitive stocks, as investors looked to lower interest rates in the coming months.
Barring tech, losses in wider Asian markets were limited by buying into sectors poised to benefit from lower interest rates.
Australia’s ASX 200 dropped 0.4%, benefiting from its lower tech weightage. The index had also shrugged off a stronger-than-expected figure on consumer inflation, released on Wednesday.
China’s Shanghai Shenzhen and Shanghai Composite indexes declined 0.1% and 0.5%, respectively, languishing at more than six-month lows amid little signs of improving sentiment.
