Investing.com – Most Asian shares fell on Thursday, with Chinese markets leading the declines as the trade war with the United States appears to be heating up and concerns over higher interest rates also weighed on sentiment.
However, shares of some chip makers rose on the back of positive earnings from Nvidia.
Regional markets were weakly ahead of Wall Street, which fell in intraday trading after minutes from a Federal Reserve meeting in late April showed policymakers growing concerned about persistent inflation. Some policymakers have also expressed a willingness to raise rates further to bring down inflation, a trend that does not bode well for risky stock markets.
US stock index futures rose in Asian trading, helped by huge gains from market darling NVIDIA Corporation (NASDAQ:).
Chinese markets fall from recent peaks due to US trade concerns
China’s indexes and indexes each fell about 0.9% on Thursday, retreating further from their highest levels in 2024.
Hong Kong’s index suffered even steeper losses, falling 1.8% after rising to a nine-month high in early May.
The losses in China came as renewed concerns about a trade war with the United States came after President Joe Biden’s administration said new tariffs would be imposed on about $18 billion of Chinese imports starting Aug. 1.
The tariffs target key growth industries in China, including electric vehicles and semiconductors.
Beijing appears to have responded to the tariffs by banning China-related trade by some U.S. companies, as well as some weapons shipments to Taiwan. Reports also say Boeing plane deliveries to China are being delayed due to regulatory scrutiny.
Sentiment toward China has also been undermined by the country’s military exercises near Taiwan, which could worsen tensions in the region.
Other markets exposed to China have retreated. Australia fell 0.6% as data also showed a slight decline in business activity.
In South Korea, the index was flat even as shares of some local chip makers rose on optimism about Nvidia.
As widely expected, interest rates remained stable and the economic growth forecast for the year was raised.
Japanese stocks rise on strong PMIs and technology strength
Japan’s index rose 0.8%, while the overall index gained 0.4%.
PMI data showed Japan returned to growth for the first time in 11 months, lifting overall activity.
But technology stocks, especially chipmakers, were the biggest driver of gains in Japanese stocks on Thursday.
Technologies and chipmakers benefit from Nvidia support
Asian technology shares posted some gains, while chip makers rose on strong earnings and Nvidia’s guidance, which bolstered hopes that demand from the artificial intelligence industry will remain strong.
Memory chip manufacturer SK Hyniks Inc. (KS:), a key supplier to NVIDIA, rose 2.7%.
Japanese manufacturer of semiconductor testing equipment, Advantest company. (TYO:), which is also heavily exposed to Nvidia, rose 3.3%, while its peers Renesas Electronics Corp. (TIO:) and Lasertech Corp. (TYO:) were up more than 3% each.
In Taiwan, shares of leading Nvidia supplier TSMC (TW:) (NYSE:) rose 1.2%, and electronics supplier Hong Hai Precision Industry Co Ltd (TW:), also known as Foxconn, added 1.5%.
Elsewhere, India index futures pointed to a weak opening, weighed down by concerns about US interest rates.