Investing.com — Asian stocks were mostly lower on Wednesday, with tech-heavy indexes dropping on anticipation of earnings from market darling Nvidia and the Australian share market falling on rising inflation.
Deep-rooted concerns about China also strained sentiment in Asia after Canada announced it would impose steep trade tariffs on Asia's largest economy.
Regional markets received moderate readings from Wall Street, with stocks and shares inching closer to record highs. However, stocks were muted due to growing caution ahead of Nvidia Inc.'s earnings report. Expectations of a rate cut also prompted a shift from technology to cyclical sectors.
U.S. stock index futures fell in Asian markets.
Asian tech stocks retreat awaiting Nvidia earnings
Technology-heavy Asian bourses fell on Wednesday, with semiconductor stocks jittery ahead of Nvidia Corp's (NASDAQ:) earnings report.
South Korea's stock index fell 0.5%, while Japan's JP225 index and Hong Kong's stock index fell about 0.3% and 0.8%, respectively.
The focus will now turn to whether Nvidia continues to benefit from strong demand for artificial intelligence, a trend that has caused the company's shares to soar nearly 160% so far in 2024.
Nvidia is seen as a bellwether in the AI industry, and results from the company's earnings due later on Wednesday are likely to have an impact on technology stocks in Asia.
Stocks directly linked to Nvidia were mixed. Taiwan's TSMC (TW:) (NYSE:) was flat in Taipei, while Japanese semiconductor-testing equipment maker Advantest (TYO:) jumped nearly 3%.
South Korean memory chip maker SK Hynix (KS:), a key supplier to Nvidia, fell 0.1%. China's largest chipmaker and Nvidia's local rival, Semiconductor Manufacturing International (HK:), fell more than 13%.
Australian shares fall as CPI data raises RBA interest rate concerns
Australia was the worst performing country in Asia, falling 0.6% despite stronger-than-expected consumer price index data for July.
The 3.5% increase was slightly stronger than expected and well above the Reserve Bank of Australia's full-year target of 2% to 3%. The figure reinforced concerns that persistently high inflation could prompt the RBA to raise interest rates, although policymakers had warned of such a scenario in early August.
Although the underlying CPI fell, it remained at a relatively high level.
Broader Asian markets also fell, with the China stock index dropping 0.7% and the China stock index dropping 0.3% as sentiment towards China soured after Canada imposed steep trade tariffs on China's electric vehicle industry.
While the economic impact of the tariffs is expected to be negative, investors are concerned about the start of a new trade war between China and Western countries, as the United States and European Union imposed similar tariffs earlier this year.
Major earnings reports are also due in China, with EV makers BYD (HK:) and Li Auto (NASDAQ:) (HK:) due to report results later on Wednesday.
Indian index futures faced resistance after crossing the 25,000 point mark, suggesting a weak start.
