Tech/AI Stocks One Of The Few Bright Spots, Negative Trends Elsewhere

Regional equity markets are mostly tracking lower, led by HK shares and China related bourses. Some positive offset has come from a sharp rise in US Nasdaq futures, ignited by a surge in chipmaker Nvidia after hours on a positive sales outlook. Nasdaq futures are +1.40%, slightly down from session highs, Eminis are +0.40%.

• We saw some wobbles in early trade, as Fitch stated it was placing the US on negative ratings watch, as debt ceiling negotiations continue. However, this hasn't had a lasting impact on sentiment.
• Clear negatives have been evident in terms of the HSI, which is off by over 2% at this stage. The HS Chine Enterprise Index is slightly worse, -2.30%. Xpeng weakness has weighed, with the company's earnings guidance reportedly disappointing the market.
• Mainland China shares also continue to track lower, unable to sustain any upside momentum, the CSI 300 sitting -0.50% weaker at this stage. Northbound stock connect outflows are -5.73bn yuan so far.
• Positive tech/chip sentiment is evident for the Taiex, up around 0.80% at this stage. The Nikkei 225 is around 0.50% firmer, but the Topix is down slightly. Chip stocks in South Korea are also higher, but not enough to drive the aggregate market higher, the Kospi last -0.50%.
• Markets are mostly weaker in SEA, although Thai shares are close to flat, while Indian stocks have opened up in modestly positive territory.