LONDON: Stock markets diverged Wednesday as traders nervously awaited earnings from US tech darling Nvidia, in addition to minutes from the Federal Reserve that could shed fresh light on the outlook for interest rates.
Hong Kong and Shanghai bourses jumped after Beijing’s latest measures to boost China’s stuttering economy, but Wall Street declines Tuesday weighed on other Asian indices.
London was dragged lower by top faller HSBC, whose share price dived more than seven percent after the banking giant revealed a shock $3-billion impairment on Chinese activities.
In the eurozone, Frankfurt and Paris stock markets edged higher in early afternoon deals.
European shares slip on miners, energy drag
World oil prices dipped and the dollar rose against the euro and yen.
“Markets remained skittish ahead of two major events that could have a significant influence over the direction of equities in the coming weeks,” said Danni Hewson, head of financial analysis at stockbroker AJ Bell.
She added that the Fed minutes and Nvidia results “have the power to move the dial for investor sentiment”.
On Thursday meanwhile, the European Central Bank publishes minutes from its most recent meeting on eurozone monetary policy.
The Fed and ECB releases will be closely examined for clues on when the pair could start cutting interest rates as inflation cools.
On the company front, traders are looking to see if Nvidia can meet high growth expectations thanks to fast uptake of artificial intelligence.
The group’s stock had sunk Tuesday on Wall Street but it is still up markedly since the beginning of the year, with enthusiasm for AI-related companies having sent its share price rocketing over the past year.
“Nvidia has not said anything yet, and the market is already making big swings,” said SwissQuote analyst Ipek Ozkardeskaya.
“It almost feels like Nvidia earnings could be a decisive moment in the AI rally as many expect the AI bubble to burst at some point.”
Elsewhere, Chinese equities rose Wednesday in what analysts said was a delayed reaction to a cut in local interest rates.
The People’s Bank of China on Tuesday said it was lowering the five-year loan prime rate, used to price mortgages, from 4.2 to 3.95 percent – the largest reduction since the key rate was revamped in 2019.
Elsewhere, Malaysia’s ringgit currency sank to a fresh 26-year low against the dollar on Wednesday, before staging a recovery.
The ringgit fell to 4.8053 against the greenback to touch the lowest level since the Asian financial crisis, hit partly by the nation’s poor export performance and high US interest rates.
Key figures around 1215 GMT
London - FTSE 100: DOWN 0.8 percent at 7,657.25 points
Paris - CAC 40: UP 0.2 percent at 7,807.87
Frankfurt - DAX: UP 0.4 percent at 17,137.98
EURO STOXX 50: UP 0.4 percent at 4,777.59
Tokyo - Nikkei 225: DOWN 0.3 percent at 38,262.16 (close)
Hong Kong - Hang Seng Index: UP 1.6 percent at 16,503.10 (close)
Shanghai - Composite: UP 1.0 percent at 2,950.96 (close)
New York - Dow: DOWN 0.2 percent at 38,563.80 (close)
Euro/dollar: DOWN at $1.0799 from $1.0808 on Tuesday
Dollar/yen: UP at 150.04 yen from 150.01 yen
Pound/dollar: DOWN at $1.2612 from $1.2623
Euro/pound: UP at 85.62 pence from 85.62 pence
Brent North Sea Crude: DOWN 0.6 percent at $81.88 per barrel
West Texas Intermediate: DOWN 0.7 percent at $76.51 per barrel
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