Asia stocks edge higher as tech meanders on Nvidia; Hong Kong hit by soft earnings

Updates at 00:15 ET (04:15 GMT) with India open, Mitsubishi/Berkshire, and Cambricon 

Investing.com-- Most Asian stocks rose marginally on Thursday with technology shares treading water as investors digested somewhat mixed earnings from artificial intelligence major Nvidia Corp.

Hong Kong shares were the worst performers for the day, hit by steep losses in food delivery major Meituan and its rivals. 

Barring tech, regional markets took some positive overnight cues from Wall Street, where the S&P 500 inched up to a record high. 

But S&P 500 Futures fell 0.1% in Asian trade, as sentiment soured after Nvidia’s earnings. 

Asia tech mixed as markets digest Nvidia earnings

Japan’s Nikkei 225 index rose 0.5%, while the broader TOPIX added 0.4% as tech stocks clocked a somewhat mixed reaction to Nvidia’s earnings. 

Offering some support to the Nikkei, shares of Mitsubishi Corp. (TYO:8058) rose as much as 2.5%, after it disclosed that Warren Buffet’s Berkshire Hathaway Inc  (NYSE:BRKa) hiked its stake in the trading house to more than 10%.

The news also sparked gains in Mitsubishi’s peers. 

SoftBank Group Corp. (TYO:9984), which is heavily invested in Nvidia, rose 3.7%, while supplier Advantest Corp. (TYO:6857) was flat. Other chip stocks including Renesas Electronics Corp (TYO:6723) and Tokyo Electron Ltd. (TYO:8035) were largely flat.

Nvidia clocked stronger-than-expected earnings for the July quarter, and also presented an above-consensus guidance for the current quarter.

But revenue from data centers, the company’s biggest breadwinner, missed expectations after it was blocked from selling its chips in China.

Nvidia flagged persistent uncertainty over Chinese sales even after it was allowed by Washington to resume its sales in late-July. The company did not account for Chinese sales in its current quarter guidance. 

Still, Nvidia flagged strong AI-fueled demand for its chips, which it said will keep driving strong earnings growth in the coming quarters. But its guidance for the current quarter was also seen missing some lofty market expectations. 

The stock fell over 3% in U.S. aftermarket trade. 

Among other tech majors, South Korea’s KOSPI rose 0.4% after the Bank of Korea kept interest rates unchanged, as expected. 

Nvidia suppliers SK Hynix Inc (KS:000660) and Samsung Electronics Co Ltd (KS:005930) both moved in a tight range.

Taiwan’s TSMC (TW:2330), which is among Nvidia’s biggest Asian suppliers, fell 1.3% in Taipei trade, while Hon Hai Precision Industry Co Ltd (TW:2317), also known as Foxconn, shed 1%. 

Hong Kong lags on weak earnings 

Hong Kong’s Hang Seng index shed 1%, lagging its regional peers as a batch of weak earnings weighed on the index.

Meituan (HK:3690) slid as much as 10% and was the worst performer on the Hang Seng after the food delivery giant clocked dismal second-quarter earnings and presented a weak outlook, amid rapidly intensifying competition in the sector. Rivals Alibaba Group (HK:9988) and JD.com (HK:9618) fell more than 3% each. 

ANTA Sports Products Ltd (HK:2020) fell nearly 6% and was also among the worst performers on the Hang Seng. While the sportswear brand did clock strong interim earnings, its shares fell on a report that it was in the running to buy struggling German rival Puma. 

Broader Hong Kong stocks were subject to some profit-taking after the Hang Seng raced to a near four-year high earlier in the week. 

China’s Shanghai Shenzhen CSI 300 outperformed its regional peers, rising 1%, while the Shanghai Composite rose 0.4%, with both indexes remaining at multi-year highs. The two were on a tear through August on improving sentiment towards China. 

Chinese AI chip developer Cambricon Tech remained an outperformer, rising 7.1% to a record high in Shanghai trade. The company, which clocked stellar earnings earlier this week, is expected to benefit greatly from China’s push for locally sourced AI chips, with uncertainty over Nvidia’s H20 sales adding to this notion.  

Among broader Asian markets, Australia’s ASX 200 was flat as positive earnings from Qantas Airways Ltd (ASX:QAN) were largely offset by weak prints from Wesfarmers Ltd (ASX:WES) and Lynas Rare Earths Ltd (ASX:LYC).

Singapore’s Straits Times index rose 0.2%.

Indian stocks hit 2-week low as Trump’s 50% tariffs take effect 

India’s Nifty 50 index fell 0.8% to a two-week low in morning trade after a holiday on Wednesday.

The index fell further after a 1% drop in the prior session, as sentiment towards India was battered by U.S. President Donald Trump’s 50% trade tariffs against the country, which came into effect from Wednesday. 

Trump’s tariffs are aimed at pressuring New Delhi into stopping its purchases of Russian oil-- a move that heralds more pressure on the Indian economy, given its vast reliance on oil imports. 

Analysts warned that Trump’s tariffs, coupled with any disruptions in oil supply, presented major economic headwinds for India in the coming quarters.

Trade talks between Washington and New Delhi have all but fallen apart in recent weeks, dampening hopes for a trade deal. 

India has so far signaled no intent to curb Russian oil buying.