Asian Stocks Drop Amid Default Fears, Nvidia Boosts Chipmaking SharesAdministrator_India | May 25, 2023 | 0 | Asia
Most Asian stocks fell on Thursday as fears of a U.S. debt default persisted amid little progress toward raising the debt ceiling, although chipmaking stocks outperformed tracking a robust outlook from Nvidia. Japan’s Nikkei 225 index rose 0.6%, supported chiefly by nearly 16% jump in semiconductor testing equipment maker Advantest Corp (TYO:6857). The stock, which ranks Nvidia among its clients, was trading at a record high of 16,280 yen. Gains in other chipmaking stocks, such as wafer maker SUMCO Corp (TYO:3436) and Tokyo Electron Ltd (TYO:8035), helped the Nikkei move back towards 33-year highs after some losses this week. Nvidia Corporation (NASDAQ:NVDA) rallied in overnight trade after the graphics cards maker beat expectations with its first-quarter earnings and forecast stronger revenue on robust demand from artificial intelligence development. The positive outlook from Nvidia brightened the outlook for the chipmaking sector, which is otherwise grappling with a potential demand slowdown in the face of worsening global economic conditions. This benefited other chipmaking stocks, with South Korea’s Samsung Electronics Co Ltd (KS:005930) up 1%. Taiwan Semiconductor Manufacturing Co (TW:2330), which is also a major Nvidia supplier, jumped nearly 3%, helping the Taiwan Weighted index rise 0.6%. But broader Asian markets retreated, tracking a weak lead-in from Wall Street as U.S. lawmakers flagged slow progress in negotiations over raising the debt ceiling. Sentiment was also rattled by ratings agency Fitch flagging a potential U.S. credit downgrade in the event of a default.
Concerns Over a Renewed COVID Wave In China Also Battered.
regional stocks, as the Chinese government warned that a new outbreak could peak by late-June. While the symptoms from the new COVID variant are mild, markets feared further disruptions in a Chinese economic recovery, which already appeared to be slowing in April. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell about 0.5% and 0.7%, respectively, while Hong Kong’s Hang Seng index plummeted 1.9%. Orient Overseas International Ltd (HK:0316) was the worst performer on the Hang Seng, down over 6% as a row with bankrupt home goods retailer Bed Bath & Beyond heated up. Other China-exposed markets also retreated, with Australia’s ASX 200 down 0.9% as losses in commodity prices dented local mining heavyweights. South Korea’s KOSPI fell 0.4%, while the Philippine Composite Index fell 0.3%. Investors remained largely wary of risk-heavy assets amid increasing fears of a U.S. default, which could trigger a recession and have devastating consequences for the global economy.