Asian markets were mostly lower Wednesday as a result of a selloff overnight in US technology shares. Gold extended its gains to a second day.
The investor sentiment in the Asia-Pacific region has been impacted by a number of factors, including the recent uncertainty surrounding artificial intelligence and the policy and legal changes in the United States.
Asian markets follow Wall Street’s losses
The equity markets in Asia-Pacific are mixed, but mostly weaker.
Japan’s Nikkei 225 fell 0.5%, dragged down by technology and semiconductor-related names.
Tokyo Electron, a manufacturer of chip equipment, fell 1.8%. Konami Group dropped 7.15%.
Topix, the broader index, did however gain 0.32%.
The S&P/ASX 200 in Australia reversed its early losses and closed 0.80% higher. In South Korea, the Kospi gained 1.51% while the Kosdaq gained by 0.32%.
Hong Kong’s Hang Seng Index rose by 0.25% and the CSI 300 index on mainland China was up by 0.61%.
Nintendo’s shares fell by more than 11 percent, even though the company maintained its sales projections for the Switch 2 system.
Investors continued to focus on possible headwinds. One of these was whether Nintendo would be affected by the sharp increase in memory prices. Memory is a critical component in gaming equipment.
Spot gold increased by more than 2.24 % to $5,057 per ounce. This was a continuation of gains made as the risk sentiment declined.
Spot Silver increased by 2.4%, to $87.22 per ounce.
Nvidia and OpenAI discuss funding
Bloomberg, citing sources familiar with the situation, reported that Nvidia was close to a deal in which it would invest around $20 billion into OpenAI, as part of its latest round of funding.
Nvidia would be making its largest investment to date. Although the contribution has been completed in part, it is still not finalized and could change.
OpenAI wants to raise $100 billion for the next round of funding, which, according to a report, could put the value of the company around $830 Billion.
Nvidia’s Chief Executive Jensen Huang publicly expressed support for this investment. He said that the company planned to invest “hugely” in OpenAI, and was willing to consider taking part in the next round of fundraising and eventually an IPO.
The Financial Times also reported Nvidia’s H200 chips sales to China had been delayed because of a US National Security Review, which added another layer to uncertainty for the chipmaker.
New York, New Jersey and other states sue Trump administration
The Trump Administration was again sued in the United States on Tuesday by New York and New Jersey over the suspension federal funding for the $16 Billion Gateway Rail Tunnel Project under the Hudson River.
States alleged the funding cutoff as a politically motivated effort to punish or coerce anyone with whom President Trump disagrees.
Letitia James, New York’s Attorney General, warned that the loss of this project could be “disastrous for commuters and workers as well as our regional economy”.
If funding was not restored, the Gateway Development Commission would be forced to stop work by February 6.
Global software sales sparked by Anthropic
Anthropic’s release of a new AI-based automation tool triggered a fresh wave of global selling of software stocks, sparking fears about disruption in the legal, financial, and data services industries.
Goldman Sachs’ basket of US Software stocks dropped 6% on Monday, the worst drop in a single day since April. Meanwhile, an index of Financial Services firms fell nearly 7%.
Asian names of software also fell.
Tata Consultancy Services dropped up to 6.5%. Infosys fell 8.1%. And Australia’s Xero plummeted as high as 15.9%.
The post Morning Brief: Asian Stocks Slide as Tech Sell-Off Deepens and Nvidia-OpenAI Deal Nears will be updated as new developments unfold.
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