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Asia-Pacific markets generally declined on Thursday as investor sentiment was affected by Nvidia's second-quarter earnings report. Despite the US chipmaker surpassing Wall Street forecasts, technology stocks across the region experienced significant sell-offs.
Stephen Innes, managing partner at SPI Asset Management, observed that Nvidia's strong earnings report did not prevent the downturn. "While Nvidia delivered impressive figures, the market's reaction suggests that high expectations may not have been fully met," Innes remarked. He noted that investors have grown accustomed to Nvidia exceeding forecasts, and the current performance, while robust, did not exceed these elevated expectations.
Innes added that the real impact might come from broader economic conditions rather than Nvidia's financials alone. "The real test will be how the US economy performs, which could influence market dynamics globally," he stated. Despite the immediate negative reaction, he suggested that savvy market participants might see this as an opportunity, especially if the downturn proves to be temporary.
Regional markets were mostly negative, led by declines in technology stocks. In Japan, the Nikkei 225 decreased slightly by 0.02% to 38,362.53, while the Topix index saw a minor increase of 0.03% to 2,693.02. Notable declines included Nidec Corporation, which fell by 3.32%, and Dainippon Screen Manufacturing, which saw a decrease of 2.84%.
In China, market performance was mixed. The Shanghai Composite dropped by 0.5% to 2,823.11, whereas the Shenzhen Component gained 0.94%, closing at 8,154.44. Significant losses were observed in Heilongjiang Interchina Water Treatment, which fell 10.04%.
Hong Kong’s Hang Seng Index was a rare positive performer, rising by 0.53% to 17,786.32, bolstered by gains in Meituan and China Mengniu Dairy. Conversely, South Korea's Kospi fell by 1.02% to 2,662.28, with Hanmi Semiconductor and SK Hynix suffering substantial declines of 9.45% and 5.35%, respectively.
In Australia, the S&P/ASX 200 slipped by 0.33% to 8,045.10, driven down by losses in the mining and technology sectors. Red 5 and Mineral Resources saw drops of 12.33% and 8.08%. New Zealand's S&P/NZX 50 declined by 0.94% to 12,353.61, led by Heartland Group’s 11.97% drop.
In the currency markets, the dollar weakened slightly against major currencies, trading at JPY 144.54 against the yen, AUD 1.4657 against the Aussie, and NZD 1.5920 against the Kiwi. Oil prices also saw minor declines, with Brent crude futures down 0.17% to $78.52 per barrel and West Texas Intermediate slipping 0.07% to $74.47 per barrel.
Despite Nvidia's strong performance and a substantial share buyback program, the company’s shares fell by 8% in extended trading, contributing to the overall negative trend in technology stocks across the Asia-Pacific region.
