(Bloomberg) — Asian shares fell on Wednesday after weak Chinese corporate earnings raised fresh concerns about a slowing economy. Traders were also awaiting Nvidia Corp.’s earnings report for clues about growth momentum in artificial intelligence stocks.
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Chinese stocks in Hong Kong fell 1.5 percent, while mainland Chinese shares slumped to their lowest since early February. Shares in bottled water maker Nongfu Spring plunged 13 percent after it posted its weakest half-year profit growth in four years, becoming the latest company to report disappointing results.
Most major indexes across the region fell, including in Japan and South Korea, where the policy-sensitive two-year government bond yield fell 3 basis points.
Bearish sentiment toward China has resurfaced after e-commerce company PDD Holdings issued a disappointing outlook earlier this week, and other results for the quarter were also disappointing. China National Offshore Oil Co., BYD Co. and Meituan Co. are all due to report results on Wednesday. Later in the U.S., investors are looking for clues about whether there's room for the artificial intelligence craze to continue, with Nvidia, currently the world's most powerful stock, due to report results.
“Asia markets are seeing weakness today, which may limit risk-taking ahead of Nvidia's earnings release this evening,” said Jun Loong Yep, market strategist at IG Asia. “Given the extreme optimism around AI stocks over the past year, Nvidia's earnings release will be seen as a make-or-break moment for global markets.”
The yen weakened 0.3% against the dollar toward the 144.50 yen level after comments by Bank of Japan Deputy Governor Ryozo Himino, who said the central bank would raise interest rates as long as inflation moves in line with the bank's forecast and that developments needed to be monitored with “utmost vigilance.”
Shares fell after Seven & i Holdings Co. sought regulatory designation in a move that could raise the hurdle for the takeover. The filing came after Alimentacion Couche-Tard SA approached the company last week.
Japanese electronics maker Sony Group saw its shares rise 2.7% after the company said it would increase the price of the PlayStation 5 in Japan.
“Ultimately, what matters is that fundamentals of the Japanese economy are improving,” David Chao, global market strategist at Invesco Asset Management, said in an interview on Bloomberg TV. “That's certainly going to be a driver of the Japanese market moving higher in the second half of the year.”
The story continues
Elsewhere in Asia, shares in China's largest automaker BYD fell 3.1 percent in Hong Kong, despite the company saying overseas shipments would account for nearly half of its total sales in future.
Shares in Fortescue, the world's fourth-largest iron-ore miner, fell 2.7 percent after the company reported full-year profit that fell short of analysts' expectations due to inflationary pressures and slowing demand from China, its biggest customer.
Elsewhere in markets, Bitcoin dipped below the $60,000 level early Wednesday as part of a broader cryptocurrency pullback that included a sharp drop in Ether, the second-largest token.
Crude oil fell in the previous session, stabilizing after ending a three-day rally, while gold fell after three days of gains and approaching all-time highs.
NVIDIA Revenues
Investors are bracing for big swings in the company's stock price after the $3.2 trillion market cap company reports earnings. Trading in the options market suggests it could move about 10% in either direction the day after the earnings release. The company's shares have risen about 160% so far this year and are up 1,000% from their bear market lows in October 2022.
Analysts on average expect the chip giant to see revenue growth of more than 70% this quarter, with some predicting even greater gains. Nvidia's results and forecasts will also serve as a barometer for AI spending across much of the tech industry.
Major events this week:
NVIDIA Earnings Report Wednesday
Fed Presidents Raphael Bostic and Christopher Waller to speak Wednesday
Eurozone consumer confidence on Thursday
US GDP, initial jobless claims Thursday
Federal Reserve President Raphael Bostic to speak Thursday
Japan unemployment rate, Tokyo consumer price index, industrial production, retail sales, Friday
Eurozone CPI, unemployment rate on Friday
US Personal Income, Spending, PCE, Consumer Sentiment Friday
Some of the key market developments:
stock
S&P 500 futures were little changed as of 11:38 a.m. Tokyo time.
Nasdaq 100 futures fell 0.2%
Japan's TOPIX was little changed
Australia's S&P/ASX 200 fell 0.5%
Hong Kong's Hang Seng Index fell 0.9%
The Shanghai Composite Index fell 0.2%
Euro Stoxx 50 futures little changed
currency
The Bloomberg Dollar Spot Index was little changed.
The euro was little changed at $1.1173
The Japanese yen weakened 0.3% to 144.35 to the dollar.
The offshore yuan weakened 0.1% to 7.1298 yuan per dollar.
Cryptocurrency
Bitcoin fell 4.2% to $59,232.12.
Ether fell 5.4% to $2,442.95.
Bonds
merchandise
West Texas Intermediate crude oil was little changed
Spot gold fell 0.4% to $2,515.16 an ounce.
This story was produced with assistance from Bloomberg Automation.
–With assistance from Abhishek Vishnoi.
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