Asian markets slip as traders await US data, Nvidia release

AFP/APP

Hong Kong: Asian markets showed a downturn on Wednesday as investors hesitated ahead of crucial US economic data and Nvidia’s earnings report, which could provide insights into the demand for artificial intelligence technology following a significant tech-driven rally this year.

While the prospect of a Federal Reserve interest rate cut next month is largely factored into current market prices, traders are closely watching next week’s important non-farm payrolls report. This data will be pivotal in gauging the Fed’s potential actions.

Despite an early August market slump triggered by US recession concerns and a rate hike by the Bank of Japan, markets have largely rebounded. This recovery has been fueled by tech sector gains, bringing some indexes close to their yearly highs.

On Tuesday, the US Conference Board’s consumer confidence index for August exceeded expectations, reaching its highest level since February. However, this news had only a modest effect on the markets, with all major Wall Street indexes ending slightly higher.

Ray Attrill from National Australia Bank commented that the stock market rebound since July, along with lower gasoline prices and the likelihood of imminent interest rate cuts, seems to have outweighed any negative impact from softening labor market indicators.

Attention is now shifting to upcoming US economic reports, including GDP growth, the Fed’s preferred inflation gauge, jobless claims, and personal income figures, which will shed light on the state of the world’s largest economy.

The key event for the day is Nvidia’s earnings report, scheduled for release after US markets close. Nvidia has surged approximately 16% this year and about 1,000% since its October 2022 low, driven by global interest in AI technologies. The company’s performance will be closely scrutinized as it significantly influences the tech sector. Analysts have warned that any disappointment in Nvidia’s earnings could lead to a sector-wide sell-off.

Stephen Innes, in his Dark Side Of The Boom newsletter, noted that Nvidia’s significant market cap weight makes its performance crucial, and traders are cautious about making directional bets until the earnings report is released.

Following Wall Street’s muted performance, Asian markets reflected a lack of buying interest. Markets in Hong Kong, Tokyo, Shanghai, Sydney, Singapore, Seoul, Taipei, Wellington, and Jakarta all experienced declines.

In oil markets, prices edged up following recent volatility. Dealers are monitoring developments in the Middle East and Libya, where production and exports have been halted by the eastern-based administration.

• Key figures around 0710 GMT –
• Tokyo – Nikkei 225: DOWN 0.2 percent at 38,199.52 (close)
• Hong Kong – Hang Seng Index: DOWN 1.0 percent at 17,696.30
• Shanghai – Composite: DOWN 0.2 percent at 2,843.77 (close)
• London – FTSE 100: UP 0.2 percent at 8,345.46
• Currency exchange rates:
  1. Dollar/yen: UP at 144.33 yen from 143.96 yen on Tuesday
  2. Euro/dollar: DOWN at $1.1173 from $1.1185
  3. Pound/dollar: DOWN at $1.3250 from $1.3261
  4. Euro/pound: DOWN at 84.32 pence from 84.34 pence
• Oil prices:
  1. West Texas Intermediate: UP 0.5 percent at $75.91 per barrel
  2. Brent North Sea Crude: UP 0.5 percent at $79.97 per barrel
• New York – Dow: FLAT at 41,250.50 (close)