Post by : Badri Ariffin

On Wednesday, Asian stock markets faced difficulties, hindered by concerns regarding high tech valuations and anticipation surrounding chipmaker Nvidia's upcoming earnings report.

The Nasdaq, rich in tech stocks, dropped 1.2% overnight, marking its second consecutive loss and declining over 6% from its October peak. In Asia, futures for the S&P 500 and Nasdaq 100 decreased by 0.2%, while European futures saw a modest dip and FTSE futures showed a slight increase of 0.1%.

Japan's Nikkei, the most negatively affected major market this November with an approximate 7% decline in U.S. dollar terms, remained flat after losing minor gains. Chinese main indexes remained stable, while Hong Kong shares edged down by 0.5%.

Investor focus is heavily directed towards Nvidia, whose graphics units fuel the rapidly expanding AI sector. The expectation is for a 56% increase in revenue for the fiscal quarter from August to October, estimating sales at $54.92 billion. Analysts caution that the stock’s high pricing may depend on steady GPU demand to maintain growth.

Bond Yields Rise Amid Rate Speculation

U.S. Treasury yields remained stable as investors assessed the probability of a Federal Reserve interest rate cut in December, now estimated at around 42%, down from near-certain last month. The benchmark 10-year yield rested at 4.12%, indicating caution over inflation risks due to political and economic factors.

In Japan, worries related to government expenditure lifted long-term bond yields to unprecedented heights, with the 10-year note reaching a 17-year peak of 1.781% following a robust 20-year auction.

Cryptocurrency and Commodities React Tentatively

Bitcoin saw a slight recovery to $91,400, bouncing back from a seven-month low, though it remains around 27% lower than its peak in October. Analysts suggest that the recent decline stems from responses to equity market vulnerabilities and changing rate expectations rather than signaling a bear market.

Currency markets remained largely subdued. The yen slipped to 155.45 against the dollar, near intervention levels indicated by authorities. The euro hovered around $1.1580, with the Australian and New Zealand dollars each declining approximately 0.5%.

Gold, which previously rose in tandem with stocks in October, has retreated to $4,070, while Brent crude dipped to $64.68 per barrel. In contrast, soybean prices soared to a 17-month high following substantial U.S. exports to China.

In summary, markets are proceeding cautiously as investors navigate a balance of optimism stemming from tech growth against uncertainties related to interest rates, government spending, and the global economic landscape.

#Asia News