Asian stocks down as technology shares remain weak

Tech-heavy Asian bourses clocked limited gains on Wednesday before Nvidia’s earnings

Most Asian stocks reversed early gains to trade lower on Wednesday, extending recent losses with heavyweight technology shares remaining weak.

Tech-heavy Asian bourses clocked limited gains on Wednesday before Nvidia’s earnings.

KOSPI dropped 0.7%, as did Hang Seng index.

Nvidia is expected to post another bumper quarter, although focus will be on whether the company can justify its massive $5 trillion valuation.

The artificial intelligence company’s earnings come amid growing concerns over an AI-fuelled bubble in tech, which were also a key driver of recent losses in the sector.

South Korean Nvidia suppliers SK Hynix Inc and Samsung Electronics Co Ltd dropped more than 1% each, while Advantest Corp. slipped 2%.

The Nikkei 225 index rose reversed course to decline 0.2% to a one-month low, while the TOPIX trimmed early gains to trade flat.

Japanese markets were battered by growing concerns over the country’s fiscal health, especially as Prime Minister Sanae Takaichi prepares to announce even more government spending.

Longer-term Japanese government bond yields remained upbeat after racing to multi-decade highs this week- a move that had spooked stock markets.

Shanghai Shenzhen CSI 300 gained 0.2%, while the Shanghai Composite was flat. The two lost relatively less ground in recent weeks due to having less exposure to tech than their peers.

In Hong Kong, Xiaomi Corp slid 4.7% and was the worst performer on the Hang Seng after the technology giant clocked mixed third-quarter earnings and warned that its core smartphones division faced headwinds from surging memory chip costs.

Xiaomi warned that it would be forced to hike smartphone prices, and that it may still see smaller margins due to chip costs.

This largely overshadowed Xiaomi clocking a stronger-than-expected profit in the quarter, as its electric vehicle and artificial intelligence ventures bore fruit. Xiaomi’s EV division clocked its first ever quarterly profit.

Broader Asian markets remained largely on the backfoot, amid caution over Nvidia.

ASX 200 and Straits Times index both drifted lower.