🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Asian stocks drop amid default fears, Nvidia boosts chipmaking shares

Published 25/05/2023, 02:10 pm
© Reuters.
AXJO
-
JP225
-
HK50
-
BBBYQ
-
NVDA
-
KS11
-
TWII
-
SSEC
-
005930
-
8035
-
3436
-
6857
-
PSI
-
0316
-
2330
-
SSNLF
-
CSI300
-

Investing.com -- Most Asian stocks fell on Thursday as fears of a U.S. debt default persisted amid little progress toward raising the debt ceiling, although chipmaking stocks outperformed tracking a robust outlook from Nvidia.

Japan’s Nikkei 225 index rose 0.6%, supported chiefly by nearly 16% jump in semiconductor testing equipment maker Advantest Corp (TYO:6857). The stock, which ranks Nvidia among its clients, was trading at a record high of 16,280 yen.

Gains in other chipmaking stocks, such as wafer maker SUMCO Corp (TYO:3436) and Tokyo Electron Ltd (TYO:8035), helped the Nikkei move back towards 33-year highs after some losses this week.

Nvidia Corporation (NASDAQ:NVDA) rallied in overnight trade after the graphics cards maker beat expectations with its first-quarter earnings and forecast stronger revenue on robust demand from artificial intelligence development.

The positive outlook from Nvidia brightened the outlook for the chipmaking sector, which is otherwise grappling with a potential demand slowdown in the face of worsening global economic conditions.

This benefited other chipmaking stocks, with South Korea’s Samsung Electronics Co Ltd (KS:005930) up 1%. Taiwan Semiconductor Manufacturing Co (TW:2330), which is also a major Nvidia supplier, jumped nearly 3%, helping the Taiwan Weighted index rise 0.6%.

But broader Asian markets retreated, tracking a weak lead-in from Wall Street as U.S. lawmakers flagged slow progress in negotiations over raising the debt ceiling. Sentiment was also rattled by ratings agency Fitch flagging a potential U.S. credit downgrade in the event of a default.

Concerns over a renewed COVID wave in China also battered regional stocks, as the Chinese government warned that a new outbreak could peak by late-June. While the symptoms from the new COVID variant are mild, markets feared further disruptions in a Chinese economic recovery, which already appeared to be slowing in April.

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell about 0.5% and 0.7%, respectively, while Hong Kong’s Hang Seng index plummeted 1.9%. Orient Overseas International Ltd (HK:0316) was the worst performer on the Hang Seng, down over 6% as a row with bankrupt home goods retailer Bed Bath & Beyond heated up.

Other China-exposed markets also retreated, with Australia’s ASX 200 down 0.9% as losses in commodity prices dented local mining heavyweights.

South Korea’s KOSPI fell 0.4%, while the Philippine Composite Index fell 0.3%.

Investors remained largely wary of risk-heavy assets amid increasing fears of a U.S. default, which could trigger a recession and have devastating consequences for the global economy.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.