Aug. 29 (Reuters) – Future outlook for Asian markets.
Hold on to your hat or prepare for takeoff?
Ultimately, Nvidia's long-awaited second-quarter results, due on Wednesday, are unlikely to push investors to either extreme, but Asian markets could still be on the defensive on Thursday.
AI's golden egg and the world's second-most valuable company reported second-quarter revenue of $30.04 billion, beating expectations of $28.7 billion, and third-quarter revenue of $32.5 billion, beating analysts' average estimate of $31.77 billion.
But that doesn't seem to have impressed enough investors who are accustomed to Nvidia's profits, revenue and forecasts not just beating expectations but far exceeding them.
Nvidia shares fell as much as 3.5% in choppy U.S. after-hours trading, weighing on tech and broader stocks when Asian markets open.
Or will Asian investors, once the dust has settled a bit, look more favorably on what appear to be fairly solid results?
The picture was already looking grim heading into the Asian trading day on Thursday. Wall Street closed lower ahead of Nvidia's earnings report on Wednesday, with the Nasdaq down more than 1% and semiconductor stocks down 1.8%, while the U.S. dollar and bond yields rose.
The dollar recorded its biggest gain since early June, rising more than 0.5 percent against a basket of major currencies, but fell for a second straight day against emerging market currencies.
There's very little on the Asia-Pacific schedule on Thursday, with only Japanese consumer confidence and New Zealand capital investment data likely to grab some investor attention.
Investor sentiment towards China remains gloomy, with the Shanghai stock market falling for a third straight day on Wednesday, plunging to its lowest level in six-and-a-half months.
Swiss investment bank UBS on Wednesday cut its forecast for China's 2024 GDP growth to 4.6% from 4.9% as a slowdown in the real estate sector has a bigger negative impact on overall economic activity than expected.
Even more worryingly, the Chinese government has lowered its 2025 GDP growth forecast to 4% from 4.6% and its average inflation rate for next year to 1.0% from 1.4%, suggesting that China's economic downturn is likely to worsen rather than improve next year.
Meanwhile, senior Chinese and US officials discussed a new meeting between President Joe Biden and Chinese President Xi Jinping in the near future, the two countries announced at a high-level meeting in Beijing on Wednesday.
The discussions came during a marathon meeting between China's Foreign Minister Wang Yi and US National Security Adviser Jake Sullivan, against the backdrop of sharp differences between the superpowers over trade and retaliatory tariffs.
Progress or another false dawn?
Key trends that could provide further direction for Asian markets on Thursday include:
– Japanese Consumer Confidence
– New Zealand Capital Investment (Q2)
– German Inflation (August)
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Reporting by Jamie McGeever
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