Most Asian stocks edged lower on Monday, with Japan on the backfoot after data showed the economy shrank sharply in the third quarter, albeit less than expected, while caution over Nvidia’s upcoming earnings also weighed.
Risk appetite remained largely on the backfoot as investors also steadily pared back expectations for a December interest rate cut by the Federal Reserve. Wall Street indexes clocked a choppy performance last week, with technology shares largely retreating.
S&P 500 Futures, however, rose 0.4% in Asian trade, with investors eyeing a bounceback after weak performances in the first two weeks of November. Nasdaq 100 Futures surged as much as 0.7%.
Japan stocks drop on weak GDP, but losses limited Japan’s Nikkei 225 and TOPIX indexes fell 0.6% apiece on Monday, after gross domestic product data showed Japan’s economy shrank at its worst pace since the second quarter of 2024.
GDP shrank 1.8% in the July-September period, but was better than forecasts for a 2.5% drop.
The drop was driven chiefly by weak private consumption and a drop in exports, with the latter hit by higher U.S. trade tariffs. Strong capital expenditure, however, offered some support to GDP.
The GDP data dampened bets that the Bank of Japan will hike interest rates in December, a notion that helped limit overall losses in Japanese shares.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. But Capital Economics analysts said signs of sticky inflation and relatively strong growth still kept bets on a January rate hike alive.
China stocks down amid diplomatic row with Japan Japanese and Chinese stocks also retreated amid a growing diplomatic row between Beijing and Tokyo.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.7% and 0.6%, respectively, while Hong Kong’s Hang Seng index shed 0.5%.
China over the weekend warned its citizens against visiting Japan, as relations between the two countries soured over Taiwan.
China’s guidance sparked sharp losses in Japanese tourism stocks.
The row was largely over comments made by Japanese Prime Minister Sanae Takaichi on Taiwan. She said last week that a Chinese attack on Taiwan could cause a “survival-threatening situation,” hinting at a military response from Tokyo.
Takaichi’s comments had drawn a sharp rebuke from Beijing.
Asia stocks cautious ahead of Nvidia earnings, S.Korea rebounds Broader Asian markets largely retreated on Monday, with tech shares on the backfoot before key earnings from market darling NVIDIA Corporation (NASDAQ:NVDA).
Investors are awaiting another blowout quarter from Nvidia, but will be watching to see whether the artificial intelligence bellwether can justify its massive, $5 trillion valuation.
Concerns over stretched tech valuations had triggered losses across Asian stocks through late-October and early-November. Japan’s SoftBank Group Corp. (TYO:9984) disclosed it had exited its stake in Nvidia, while investor Michael Burry, who predicted the 2008 financial crisis, also disclosed a short position against the firm.
Caution over Nvidia was furthered by filings over the weekend showing that billionaire investor Peter Thiel offloaded his nearly $100 million stake in Nvidia.
South Korea’s KOSPI, which was among the worst hit by this trend, rebounded sharply on Monday with a 1.7% rise. Data also showed South Korea’s exports growing steadily in October, while imports shrank.
The KOSPI’s advance was driven chiefly by outsized gains in chipmakers SK Hynix Inc (KS:000660) and Samsung Electronics Co Ltd (KS:005930), as local media reports showed the two’s semiconductor inventories had fallen sharply, signaling outsized demand. Weak inventories are also expected to ramp up global chip prices.
Samsung was rose after it pledged to invest in building more domestic chipmaking facilities.
Among other Asian stocks, Australia’s ASX 200 fell 0.3%, while Singapore’s Straits Times index fell 0.1%.
India’s Nifty 50 index rose 0.3% in early trade, with the index on the cusp of retaking the 26,000 point level.
