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22 April 2024

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Asian markets open higher after US tech gains

BI Desk || BusinessInsider

Published: 00:07, 23 February 2024  
Asian markets open higher after US tech gains

Photo: Collected

Asian markets opened mostly up on Thursday, after higher-than-expected earnings from tech giant Nvidia and as investors weigh Fed minutes signalling most US officials are in no rush to cut rates.

Highly anticipated earnings results from US chip titan Nvidia beat expectations late Wednesday, with the firm reporting a quarterly profit of $12.3 billion on record-high revenue driven by demand for its AI-powering chips.

Following a mixed day on Wall Street, the company announced record revenue of $22.1 billion in the quarter that ended late January and $60.9 billion for the fiscal year, reports BSS/AFP.

Analysts say its bumper profits could drive up Asian markets, with Tokyo stocks moving towards a record high on Nvidia's gains.

"As goes Nvidia, so goes the market," Kim Forrest, chief investment officer of Bokeh Capital Partners, told Bloomberg.

Its earnings report "does confirm the narrative that AI is going to continue to be strong for the foreseeable future. This narrative supported the markets last year, why wouldn't it do the same this year?" Forrest added.

Stephen Innes, of SPI Asset Management, said Asian equities were "poised for a potential rise" on Thursday, supported by Nvidia's gains in after-hours US trading, which saw its shares rise more than eight percent.

The firm's first-quarter outlook exceeded analysts' forecasts, he noted.

Hong Kong stocks were down in early trade, while Seoul, Taipei, Bangkok, Manila and Wellington were all up. Shanghai and Sydney were flat.

London was dragged lower Wednesday by HSBC, whose share price plunged more than eight percent after the lender revealed a shock $3-billion impairment on Chinese activities.

Investors were looking to the European Central Bank's minutes of its most recent meeting on eurozone monetary policy, to be released later Thursday, for clues on when it could start cutting rates.

In the United States, January's Federal Reserve policy meeting minutes showed that officials had mixed views over the timing of cutting interest rates -- but most members were more concerned about moving too early.

Traders will "be glossing over the hawkishly skewed details of the US Federal Reserve's January meeting", according to Innes.

"These minutes revealed that policymakers are concerned about the potential risks of cutting interest rates too soon."