Asian markets diverge with eyes on Nvidia earnings
A screen reflecting on glass displays the Hang Seng stock index at the Central district in Hong Kong, China, on Apr 7, 2025. (Photo: REUTERS/Tyrone Siu)
HONG KONG: Asian markets diverged on Wednesday morning (Aug 27) following broad losses the previous day, as attention turns from political pressure on the US central bank to a key earnings report by AI giant Nvidia.
Tuesday's declines in Tokyo, Hong Kong, Seoul and across the continent were followed by modest gains on Wall Street as investors tried to look past US President Donald Trump's move to oust a Federal Reserve governor.
In Europe, shares fell and the Paris stock market tumbled over fears that France's minority government could be toppled, after Prime Minister Bayrou proposed a confidence vote to break an impasse over his proposed budget cuts.
During Wednesday trading in Asia, Tokyo, Seoul and Sydney finished slightly up, while Taipei jumped 0.9 per cent.
Shanghai's slide came despite the surging share price for Cambricon - a leading Chinese chipmaker and local Nvidia competitor - on the heels of a record first-half profit posted Tuesday.
Nvidia will report second-quarter financial results on Wednesday, closely watched as a bellwether for the industry as worries about a tech bubble rise.
"The company has outgrown the tech sector and become the market's lodestar," wrote Stephen Innes of SPI Asset Management in a note.
"Analysts expect revenue to soar 53 per cent to US$46 billion, but this is about more than revenue beats," he added.
"The crowd wants reassurance that the AI revolution isn't just smoke and mirrors."
London, Paris and Frankfurt ticked slightly up during early trading in Europe.
Heavily impacting markets this week has been a highly unusual move by Trump to fire Federal Reserve governor Lisa Cook.
The US leader cited allegations of false statements on her mortgage agreements, but Cook said Trump had no authority or legal cause to fire her while her lawyer announced a planned legal challenge on Tuesday.
The step adds to fears about the independence of the central bank, fuelled by Trump's repeated public demands to Fed chairman Jerome Powell to lower interest rates.
Powell suggested on Friday that more cuts to US interest rates were on the horizon, causing markets to surge.
Investors are also awaiting a US economic growth update on Thursday and a key inflation gauge Friday for clues on how far interest rates might fall - or not - in the coming months.
Oil prices continued Tuesday's slow fall, paring back recent increases as traders track a possible peace deal to end the war between Ukraine and key crude producer Russia.
