Asian Equities Weigh Down By Weaker Tech Prices

Asian equities fell today, driven by weakness in major tech stocks ahead of Nvidia's earnings report, with concerns over artificial intelligence demand and disappointing results from Chinese e-commerce firm PDD weighing on sentiment. The MSCI Asia Pacific Index declined, led by losses in Hong Kong, mainland China, Taiwan, and South Korea. Meanwhile, the growing chances of an upcoming US rate cuts and a weaker dollar provided some support, especially for Japanese equities, which benefited from a firmer yen with small-cap stocks performing the best. Overall, markets are in consolidation mode after recent gains, with attention focused on upcoming corporate earnings and central bank actions.

• Japanese equities traded mixed today, with modest gains in small-cap and domestic-oriented firms driven by a stronger yen, which shifted investor focus towards local companies like retailers and information-system vendors. While the broader Topix Index outperformed, blue-chip stocks in the Nikkei 225 faced some pressure, reflecting a rotational trade within the market. Investor sentiment was cautious overall, as the broader Asian market struggled due to weakness in technology stocks and concerns over slowing demand in the artificial intelligence sector ahead of Nvidia's earnings report. Despite these concerns, Japan’s market showed relative resilience, supported by expectations of U.S. Federal Reserve rate cuts, which could benefit Japanese companies with a stronger yen and more stable economic outlook.
• Taiwanese equities declined, led by losses in technology stocks as concerns over the sustainability of artificial intelligence demand weighed on the market. Companies like TSMC were among the biggest drags (-0.75%), reflecting broader caution in the tech sector ahead of Nvidia’s highly anticipated earnings report. Investors are also cautious due to mixed signals from global markets, with the potential for U.S. rate cuts providing some support but not enough to offset worries about slowing growth in key sectors. The Taiex is currently down 0.46%.
• South Korean stocks fell, driven by weakness in semiconductor and technology shares, mirroring declines in global tech markets. Concerns about the future demand for AI-related products, coupled with a broader tech sell-off, pressured key companies like Samsung (-0.26%) and SK Hynix (-3.10%). the KOSPI is 0.35% lower, while the KOSDAQ is down 0.50%
• Australian equities are slightly lower today with strong performances in the mining and energy sectors in particular BHP and Woodside Energy leading the gains. Woodside advanced over 4% after reporting first-half net income that exceeded analyst expectations while BHP shares also rose by as much as 2.7%, buoyed by better-than-expected underlying profit and a robust dividend, gains have been offset by losses in financials. New Zealand equities are down 1% with healthcare contributing the most to the loses.
• In Asia EM, Indonesia's JCI is down 0.60%, Thailand's SET is down 0.05%, Singapore Straits Times is down 0.30%, while Malaysia's KLCI is 0.70% higher and Philippines PSEi is 0.30% higher.