(Bloomberg) — Asian equities slipped on Wednesday as weak corporate earnings in China raised fresh concerns over its flagging economy. Traders are also awaiting Nvidia Corp.’s results for cues on the growth momentum of artificial-intelligence related stocks.
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Chinese stocks in Hong Kong fell as much as 1.5%, while those in the mainland declined to their lowest since early February. Bottled water maker Nongfu Spring Co. shares plunged as much as 13% after posting the slowest half-year profit growth in four years, becoming the latest company to issue disappointing results.
Most major benchmarks across the region were in the red, with Japan and South Korea also seeing losses. Two-year Treasury yields, which are more sensitive to interest-rate policy, fell three basis point.
Weak sentiment toward China reemerged following disappointing outlook guidance earlier this week from e-commerce firm PDD Holdings Inc, adding to other disappointing results this season. Cnooc Ltd., BYD Co. and Meituan are all set to report on Wednesday. Later in the US, investors will be looking for any clues on whether the artificial-intelligence euphoria has more room to run with the world’s currently most influential stock, Nvidia, set to report earnings.
“We are seeing a weaker showing in Asia today, potentially as the lead-up to Nvidia’s results tonight may limit risk-taking,” Jun Rong Yeap, a market strategist with IG Asia Pte., said. “Nvidia’s results will be looked upon as a make-or-break moment for global markets, given the extreme optimism priced around AI stocks over the past year.”
The yen extended losses to 0.3% against the dollar, heading toward the 144.50 barrier, following comments from Bank of Japan’s Deputy Governor Ryozo Himino. The BOJ will raise interest rates as long as inflation moves in line with the bank’s view, and it must monitor developments with “utmost vigilance,” Himino said.
Seven & i Holdings Co. shares slipped after the operator of 7-Eleven stores sought designation from authorities in a move that may raise potential hurdles for a takeover. Its application came after Alimentation Couche-Tard Inc. approached the company last week.
Japanese consumer electronics company Sony Group Corp. saw its shares climb as much as 2.7% after saying it will hike the price of its PlayStation 5 in Japan.
“Ultimately what is more important are the economic fundamentals for Japan which are improving,” David Chao, a global market strategist at Invesco Asset Management, said in a Bloomberg TV interview. “That certainly will be what will drive Japanese market up in the second half of this year.”
In other Asian corporate developments, shares of China’s top-selling automaker BYD fell as much as 3.1% in Hong Kong despite saying it sees overseas deliveries to account for almost half of total sales in the future.
Fortescue Ltd.’s shares dipped as much as 2.7% after the fourth-largest iron ore miner reported full-year profit that missed analyst forecasts, owing to inflationary pressures and a slowdown in demand from biggest customer China.
In other markets, Bitcoin fell below the $60,000 level early Wednesday as part of a broad crypto market retreat that included a sharp drop in second-largest token Ether.
Oil was steady after sliding in the previous session to end a three-day rally. Gold retreated after a three-day advance that’s taken it closer to its all-time high.
Nvidia Earnings
Investors are gearing up for big swings in Nvidia’s shares after the $3.2 trillion company reports. Trading in the options market implies a nearly 10% move in either direction on the day following the results. The stock has rallied about 160% this year and 1,000% from its October 2022 bear-market low.
Analysts, on average, are predicting that the giant chipmaker will project revenue growth of more than 70% for the current quarter. Some are estimating an even larger surge. Nvidia’s results and forecast also will serve as a barometer for AI spending across much of the technology industry.
Key events this week:
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Nvidia earnings, Wednesday
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Fed’s Raphael Bostic and Christopher Waller speak, Wednesday
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Eurozone consumer confidence, Thursday
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US GDP, initial jobless claims, Thursday
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Fed’s Raphael Bostic speaks, Thursday
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Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
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Eurozone CPI, unemployment, Friday
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US personal income, spending, PCE; consumer sentiment, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 11:38 a.m. Tokyo time
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Nasdaq 100 futures fell 0.2%
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Japan’s Topix was little changed
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Australia’s S&P/ASX 200 fell 0.5%
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Hong Kong’s Hang Seng fell 0.9%
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The Shanghai Composite fell 0.2%
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Euro Stoxx 50 futures were little changed
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1173
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The Japanese yen fell 0.3% to 144.35 per dollar
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The offshore yuan fell 0.1% to 7.1298 per dollar
Cryptocurrencies
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Bitcoin fell 4.2% to $59,232.12
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Ether fell 5.4% to $2,442.95
Bonds
Commodities
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West Texas Intermediate crude was little changed
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Spot gold fell 0.4% to $2,515.16 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Abhishek Vishnoi.
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