Investing.com — Most Asian stocks fell on Thursday as fears of a U.S. debt default persisted amid little progress toward raising the debt ceiling, although chipmaking stocks outperformed tracking a robust outlook from Nvidia.
Japan’s index rose 0.6%, supported chiefly by nearly 16% jump in semiconductor testing equipment maker Advantest Corp (TYO:). The stock, which ranks Nvidia among its clients, was trading at a record high of 16,280 yen.
Gains in other chipmaking stocks, such as wafer maker SUMCO Corp (TYO:) and Tokyo Electron Ltd (TYO:), helped the Nikkei move back towards 33-year highs after some losses this week.
Nvidia Corporation (NASDAQ:) rallied in overnight trade after the graphics cards maker with its first-quarter earnings and forecast stronger revenue on robust demand from artificial intelligence development.
The positive outlook from Nvidia brightened the outlook for the chipmaking sector, which is otherwise grappling with a potential demand slowdown in the face of worsening global economic conditions.
This benefited other chipmaking stocks, with South Korea’s Samsung Electronics Co Ltd (KS:) up 1%. Taiwan Semiconductor Manufacturing Co (TW:), which is also a major Nvidia supplier, jumped nearly 3%, helping the index rise 0.6%.
But broader Asian markets retreated, tracking a weak lead-in from Wall Street as U.S. lawmakers flagged slow progress in negotiations over raising the debt ceiling. Sentiment was also rattled by ratings agency Fitch flagging a in the event of a default.
Concerns over a renewed COVID wave in China also battered regional stocks, as the Chinese government warned that a new outbreak could peak by late-June. While the symptoms from the new COVID variant are mild, markets feared further disruptions in a Chinese economic recovery, which already appeared to be slowing in April.
China’s and indexes fell about 0.5% and 0.7%, respectively, while Hong Kong’s index plummeted 1.9%. Orient Overseas International Ltd (HK:) was the worst performer on the Hang Seng, down over 6% as a row with bankrupt home goods retailer Bed Bath & Beyond heated up.
Other China-exposed markets also retreated, with Australia’s down 0.9% as losses in commodity prices dented local mining heavyweights.
South Korea’s fell 0.4%, while the fell 0.3%.
Investors remained largely wary of risk-heavy assets amid increasing fears of a U.S. default, which could trigger a recession and have devastating consequences for the global economy.
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