Asian stocks showed mixed results after the advances in South Korean shares stopped with the cooldown of the technology stocks rally.
Last night, the Wall Street ended lower due to losses in the technology sector, contributed by rising worries over disruptions from fast advancements in artificial intelligence.
The drop in NASDAQ was sharper compared to broader indexes, as the investors were cautious ahead of key earnings from big US technology firms.
Alphabet (NASDAQ: GOOGL) is expected to report results later on Wednesday, while Amazon (NASDAQ: AMZN) will be reporting on Thursday. Both of these earnings are considered crucial in assessing the strength of cloud, advertising, and AI-related spending.
Asian stock markets began to bounce back after a big jump on the previous day, where every country in Asia saw a rise in stock prices as the KOSPI in South Korea gained almost 1 percent to close at 5,361.85, creating new record highs.
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The KOSPI is up approximately 7% since yesterday, with large increases coming from technology stocks and chipmakers. As a result of yesterday’s close on the Nikkei 225 index (Japan), which had increased approximately 4%, the index was down approximately 0.7% on Wednesday.
Market sentiment regarding AI; as it has been very volatile recently, and because many U.S. technology stocks fell, this, combined with profit-taking from large rallies, led to downward pressure on Regionally.
As a result, the Shanghai Composite (China) was up 0.1 percent, the Shanghai Shenzhen CSI-300 was down 0.2 percent, and the Hong Kong Hang Seng index was down 0.5 percent. In Australia, the S&P/ASX 200 index was up 0.5%, and Singapore’s STI was flat.
Nifty 50 (India) was slightly higher in futures and increased approximately 3% after a new U.S.-India trade agreement, resulting in lower tariffs, was signed yesterday. The concern remains regarding the Federal Reserve system.
Currently, the focus will be on the China services PMI data, which will be released within the next few days. Investors have also become cautious regarding the nomination of Kevin Warsh as the next Chairman of the Federal Reserve by the President of the United States, who is believed as Hawkish. Investors are concerned that the Fed will raise U.S. interest rates more than expected and that rates will remain elevated for a greater period than anticipated due to the data.
Wednesday also provided a new result in a private survey, indicating that the Chinese services industry had its strongest growth rate (3 months) in January. Although this result has provided some support/trust regarding demand for goods/consumers from China on a global basis, investors remain cautious due to concerns regarding sub-par growth and/or lots of volatility within China’s Economy.
