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Asian stocks rise with TSMC earnings on tap; Rate fears limit gains

Published 18/04/2024, 12:38 pm

Investing.com-- Most Asian stocks recovered from recent losses on Thursday, shrugging off a weak lead-in from Wall Street as investors bet on a strong earnings report from top chipmaker TSMC to spur a rally in technology.

Elements of bargain buying were also in play after fears of higher-for-longer U.S. interest rates and worsening geopolitical tensions in the Middle East sparked a nearly week-long rout in regional markets.

Asian stocks rose past a weak overnight session on Wall Street, which was marked chiefly by a rout in chipmaking stocks following disappointing earnings from semiconductor technology maker ASML Holding NV (AS:ASML). US futures also rose slightly in Asian trade.

Still, bigger gains in Asian markets were held back by persistent concerns over higher-for-longer U.S. interest rates, especially after hawkish signals from the Federal Reserve this week.  

Chinese stocks extend gains, momentum slows 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.1% each on Thursday, extending a run of recent gains following strong growth figures for the first quarter. Hong Kong's Hang Seng rose 0.8% after sinking to a 1-1/2 month low earlier this week.

Hopes of more stimulus measures from Beijing also spurred buying into Chinese markets.

But Chinese markets now appeared to be losing some momentum as concerns over near-term growth still persisted, especially as some readings for March suggested that growth was stalling after a strong start to the year. 

TSMC earnings awaited for more AI cues 

TSMC (TW:2330) (NYSE:TSM), the world’s biggest contract chipmaker, is set to report its first-quarter earnings later on Thursday. 

The chipmaker fell 0.8% in Taiwan trade, but remained close to recent record highs. 

Monthly sales data showed TSMC clocked a 16.5% jump in its first-quarter sales, as it benefited from increased demand from the artificial intelligence industry.

TSMC, whose earnings usually act as a bellwether for global chip demand, is expected to clock strong profit growth on increased AI demand.

But weaker-than-expected quarterly earnings from ASML, which plays a key role in the global chipmaking industry, still put some investors on edge over a potential slowdown in AI demand. 

Asian stock gains limited by rate fears 

Gains in broader Asian markets were held back by concerns over higher-for-longer U.S. interest rates, with most regional benchmarks still nursing steep losses so far in April.

Australia’s ASX 200 rose 0.6%  as data showed some cooling in the labor market. But labor conditions still remained largely tight, giving the Reserve Bank of Australia more headroom to keep rates higher for longer.

Japan’s Nikkei 225 rose 0.2%, while the broader TOPIX added 0.5%.

South Korea’s KOSPI was an outperformer, rising 1.8% as it rebounded from over two-month lows hit this week.

Gift Nifty 50 Futures for India’s Nifty 50 index pointed to a weak open, with the index set to log some losses in catch-up trade after a holiday on Wednesday.

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