Asia’s major stock markets saw a day of mixed fortunes on Thursday as fading hopes of a turnaround in US interest rates, China-Taiwan tensions and better-than-expected earnings from AI-darling Nvidia all had an impact on investor mood.
China’s military started two days of “punishment” drills held in five areas around Taiwan just days after new Taiwan President Lai Ching-te took office, sending tech stocks downwards, while policymakers in major economies preferred to take a patient approach to monetary easing amid sticky inflation.
Japan’s Nikkei share average rose to finish at more than a one-month closing high as technology stocks rallied after US peer Nvidia’s earnings delivered on sky-high expectations.
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Tokyo’s tech shares rallied on the news, buoying the Nikkei share average to end up 1.26% at 39,103.22, its highest closing level since April 15. The broader Topix closed 0.64% higher at 2754.75.
Chip-related shares have been among the Nikkei’s best performers over the past year, helping the benchmark index climb to a record intraday high of 41,087.75 in March.
Gains were more subdued outside of tech as investors remained cautious regarding the Bank of Japan’s policy path, analysts said.
Japan’s 10-year government bond yield rose to the psychologically significant 1% mark on Wednesday, renewing concerns in the wake of the BOJ’s recent hawkish signals, including an unexpected cut to its bond offer amounts last week.
China and Hong Kong stocks fell, though, tracking regional markets lower as investors digested the implications of policymakers in major economies signalling a wait-and-see approach on interest rates.
China’s central bank has guided some commercial banks to accelerate the pace of lending in May, four sources with knowledge of the matter said, after broad credit growth in April hit a record low.
China’s blue-chip CSI300 index was down 1.16% with, earlier in the session, its financial sector sub-index lower by 0.94%, the consumer staples sector down 0.67%, the real estate index down 3.33% and the healthcare sub-index down 0.78%.
The Shanghai Composite Index dropped 1.33%, or 42.15 points, to 3,116.39, while the Shenzhen Composite Index on China’s second exchange slipped 1.72%, or 30.63 points, to 1,754.06.
Chinese H-shares listed in Hong Kong – stocks belonging to companies from the Chinese mainland – fell 1.45% to 6,719.13, while the Hang Seng Index lost 1.70%, or 326.89 points, to end at 18,868.71.
UK Inflation Woes
Elsewhere across the region, in earlier trade, Sydney and Seoul were also in the red but Singapore, Mumbai, Wellington, Taipei and Manila all gained. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.26%.
More hawkish-than-expected minutes of the Federal Reserve’s latest policy meeting, a hot UK inflation print and a sobering assessment of New Zealand’s inflation problems from the country’s central bank have caused investors to pare their bets of the pace and scale of global rate cuts expected this year.
US stock futures meanwhile received a boost after AI darling Nvidia forecast quarterly revenue above estimates after the bell on Wednesday, which sent its shares jumping 5.9% in extended trade.
S&P 500 futures tacked on 0.6%, while Nasdaq futures jumped 0.95%. Eurostoxx 50 futures inched up 0.38%.
Data on Wednesday showed inflation in Britain eased less than expected and a key core measure of prices barely dropped, prompting investors to pull bets on a Bank of England rate cut next month.
Earlier that day, the Reserve Bank of New Zealand wrongfooted markets by warning cuts were unlikely until far into 2025 at the conclusion of its policy meeting where it held its cash rate steady as expected.
In commodities, gold dipped 0.2% to $2,372.93 an ounce, away from its record high of $2,449.89 hit on Monday, as the prospect of higher-for-longer US rates took some shine off the yellow metal.
Oil prices likewise fell, with Brent crude down 0.56% to $81.44 a barrel, while US crude edged 0.7% lower to $77.03 per barrel.
Key figures
Tokyo – Nikkei 225 > UP 1.26% at 39,103.22 (close)
Hong Kong – Hang Seng Index < DOWN 1.70% at 18,868.71 (close)
Shanghai – Composite < DOWN 1.33% at 3,116.39 (close)
London – FTSE 100 < DOWN 0.24% at 8,350.25 (0934 BST)
New York – Dow < DOWN 0.51% at 39,671.04 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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