Asian markets fell on Thursday, mirroring the downward trend in Wall Street futures, as Nvidia’s earnings report failed to meet the high expectations of optimistic investors. Nvidia’s forecasted third-quarter revenue of USD 32.5 billion did surpass Wall Street’s projections, but it didn’t meet the ambitious targets set by those who had driven a 180% surge in its shares this year.
As a result, Nvidia’s stock plummeted by 7.6% in after-hours trading, wiping out approximately USD 236 billion of its market value.
The negative sentiment spread across Asian markets, particularly affecting tech-heavy indices. The MSCI Asia-Pacific shares index, excluding Japan, dropped by 0.6%, with South Korea’s KOSPI down 0.7% and Japan’s Nikkei slipping by 0.4%.
Shares of Taiwan’s TSMC, a major Nvidia chip contractor, fell by 2.4%, contributing to a 1.3% decline in the broader Taiwanese market.
In China, caution regarding the economic outlook persisted, further pressured by disappointing earnings reports. The blue-chip index fell for the fourth day in a row, down 0.4%, as concerns about the country’s economic recovery dampened investor sentiment.
UBS’s recent revision of China’s 2024 GDP growth forecast, lowering it from 4.9% to 4.6%, added to the overall cautious mood. Shares of Chinese battery manufacturer CATL dropped by 2% after US lawmakers proposed placing the company on a restricted list due to alleged ties with Beijing’s military.
In the currency and bond markets, the US dollar stabilised after hitting its lowest level in over a year, bolstered by increasing speculation of a Federal Reserve rate cut. Futures markets have now priced in a 25-basis-point rate cut next month, with a 35% chance of a 50-basis-point reduction.
Treasury yields presented a mixed picture, with the two-year and ten-year yield curve nearing a positive inversion—a scenario last seen in July 2022, except for a brief occurrence earlier this month.
Gold prices continued their upward trend, rising by 0.4% to USD 2,512.89 an ounce, nearing the record high of USD 2,531.6. Oil prices also experienced a modest recovery following two consecutive days of losses, with Brent crude futures inching up by 0.1% to USD 78.75 per barrel and US West Texas Intermediate crude futures climbing by 0.2% to USD 74.69 per barrel.
As trading continues, investors are keenly awaiting US weekly jobless claims and inflation data from Germany and Spain, which could offer further clues regarding the Federal Reserve’s upcoming interest rate decisions and potentially shape global market trends in the coming weeks.
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