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Investing.com-- Most Asian stocks rose sharply on Thursday with technology shares rebounding after stronger-than-expected earnings and positive commentary from Nvidia helped quell some concerns over a bubble in the sector.
Regional markets took positive cues from Wall Street, which snapped a four-day losing streak in overnight trade. U.S. stock index futures shot up after Nvidia’s earnings, with S&P 500 Futures and Nasdaq 100 Futures up 1.2% and 1.7%, respectively, by 21:16 ET (02:16 GMT).
Hong Kong shares lagged as local tech names clocked mixed gains, while Xiaomi continued to fall after it warned of higher global smartphone prices due to rising chip costs.
Asia tech rally boosts Japan, South Korea on Nvidia cheer
Japan’s Nikkei 225 index rallied 3.2%, while South Korea’s KOSPI surged 2.6% as tech stocks ascended sharply on Nvidia’s earnings.
The world’s most valuable listed company clocked stronger-than-expected quarter earnings, while its guidance for the current quarter also beat estimates on what it described as outsized AI-fueled demand.
NVIDIA (NASDAQ:NVDA) CEO Jensen Huang also dismissed concerns over an AI bubble, claiming that Nvidia’s customer base was far larger than just big AI spenders, or hyperscalers. Nvidia’s shares surged over 5% in aftermarket trade.
Tech shares had fallen sharply in the runup to Nvidia’s earnings, amid heightened concerns over stretched valuations in the sector. The sector also benefited from dip-buying on Thursday.
Among individual movers, Nvidia suppliers Samsung Electronics Co Ltd (KS:005930), SK Hynix Inc (KS:000660), and Advantest Corp. (TYO:6857) rallied between 4% and 9% in South Korean and Japanese trade, respectively. SoftBank Group Corp. (TYO:9984) jumped 3.5%, although the tech conglomerate entirely exited its stake in Nvidia in October.
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Most other Asian indexes also clocked strong gains. Australia’s ASX 200 jumped 1.2%, aided by gains in mining stocks, while local tech and data center names, including Wisetech Global Ltd (ASX:WTC), also rallied.
Singapore’s Straits Times index rose 0.3%, while futures for India’s Nifty 50 index rose 0.2%.
Mainland China stocks lagged on having a relatively smaller tech weightage. The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.1% each.
Optimism over tech helped investors look past a worsening diplomatic row between Japan and China, with Beijing having threatened much action against Tokyo over comments made by Prime Minister Sanae Takaichi on Taiwan.
Hong Kong lags as Xiaomi falls further
Hong Kong’s Hang Seng index was an outlier in Asia, falling 0.2% despite some gains in local tech shares.
A bulk of said gains were offset by a 3% drop in Xiaomi Corp (HK:1810). The stock extended losses into a third straight session, as a warning on higher chip costs and concerns over its prospects in the electric vehicle market largely overshadowed strong third-quarter profits from the electronics giant.
Videogame developer NetEase Inc (HK:9999) fell 3% and was also among the top decliners on the Hang Seng, ahead of its third-quarter earnings due on Thursday.
The Hang Seng was also pressured by losses in EV stocks, as markets fretted over slowing demand in the sector after the end of several key government subsidies.