Asia markets mostly fall as investors assess Nvidia results; Adani Group companies plunge

Lim Hui Jie

Asia-Pacific markets mostly fell Thursday, with investors watching tech shares in the region after chipmaker Nvidia reported better-than-expected results.

Nvidia reported a 94% year-on-year surge in revenue for the third quarter to $35.08 billion. However, that is still a consecutive slowdown from the previous three quarters, when sales rose 122%, 262%, and 265%, respectively.

Net income during the quarter rose to $19.3 billion, versus $9.24 billion in the same period a year ago. 

All eyes are on Indian stocks related to billionaire Gautam Adani, after the chair of India’s Adani Group was indicted with others in New York federal court on charges related to a massive bribery and fraud scheme.

Shares of Adani Group companies plunged, with flagship Adani Enterprises down 20%, while the company in the eye of the storm Adani Green Energy tanked 18.19%. Adani Energy also fell 20%. 

Adani Power lost 15.18%, while Adani Port’s share price dropped 15%, The group’s retail arm Adani Wilmar shed 10%.

The Nifty 50 index was down 0.84%, while the BSE Sensex lost 0.8%.

Japan’s Nikkei 225 fell 0.93%, and the broad-based Topix slipped 0.54%. Semiconductor equipment supplier Advantest was one of the the largest losers on the Nikkei, falling almost 3%. The company disclosed it’s relationship with Nvidia in 2023.

South Korea’s Kospi rose 0.38%, while the small-cap Kosdaq was marginally up. Nvidia supplier SK Hynix reversed gains to drop 0.41%, while heavyweight Samsung Electronics gained 2.53%.

Australia’s S&P/ASX 200 traded down 0.17%.

Hong Kong’s Hang Seng index fell 0.13%, while mainland China’s CSI300 was down 0.22%.

Overnight in the U.S., the S&P 500 ended Wednesday flat, with Nvidia shares slipping nearly 1% ahead of the company’s highly anticipated earnings report. Investors also assessed disappointing results from Target.

The tech-heavy Nasdaq Composite lost 0.11%, while the broad index closed little changed at 5,917.11, The Dow Jones Industrial Average was a bright spot, gaining 0.32%.

— CNBC’s Samantha Subin and Brian Evans contributed to this report.

Adani Group shares nosedive after chairman Gautam Adani charged with fraud in New York

India’s Adani Group saw shares of its companies plunge Thursday after its billionaire chairman Gautam Adani was indicted in a New York federal court over his alleged involvement in an extensive bribery and fraud operation.

The 62-year-old billionaire and the seven other defendants have been accused of paying over $250 million in bribes to Indian government officials to secure solar energy contracts that could generate more than $2 billion in profits.

The Indian group’s flagship firm Adani Enterprises fell 10%, while the company in the eye of the storm Adani Green Energy tanked 17.28%. Adani Energy fell 20%. 

Adani Power lost 13.81%, Adani Port’s share price dropped 10%, while the group’s retail arm Adani Wilmar shed 7.87%.

— Lee Ying Shan

Asian chip stocks slump as Nvidia’s slowing revenue growth worries investors

Asian semiconductor-related stocks mostly slumped on Thursday after Nvidia reported an earnings forecast that failed to meet the lofty expectations of some investors.

While Nvidia’s third-quarter results exceeded analysts’ expectations and delivered a strong forecast for the current quarter, its shares still shed 2.5% in extended trading to roughly $142.20 apiece.

“No matter how good the company does … if the guide is anything less than the high end of the whisper, you will probably see some selling pressure,” Daniel Newman, CEO at the Futurum Group, told CNBC’s “Squawk Box Asia” following the report.

The sentiment has spilled over to Asia, with stocks tied to Nvidia suppliers as well as other chip companies mostly falling.

— Anniek Bao

Adani dollar bonds tumble after U.S. bribery charges

Dollar bond prices for Adani companies fell sharply in early Asia trade on Thursday after the Indian conglomerate’s billionaire chairman was indicted in New York over allegations of bribery and fraud.

Prices for Adani Port and Special Economic Zone debt maturing in August 2027 fell more than five cents on the dollar, according to LSEG data.

Adani Electricity Mumbai debt maturing in February 2030 fell nearly eight cents and dollar bonds issued by Adani Transmission also notched falls larger than five cents to trade just above 80 cents.

The price falls were the biggest since February 2023 when short-seller Hindenburg Research published a negative report, questioning the group’s debt levels and use of tax havens.

— Reuters

CNBC Pro: HSBC names 3 ‘underappreciated’ Asian stocks to watch in 2025 — giving one 63% upside potential

Asian markets will look “very different” in 2025 in light of China’s new policy measures, the slowing Indian economy and Southeast Asian countries’ investments into new infrastructure, according to HSBC.

Still, several stocks can “benefit from these changes in Asia as they are best positioned to capture growth from these opportunities and that our analysts like from a bottom-up perspective,” the bank’s analysts noted.

“In highlighting these stocks, we decided to look outside of consensus ideas, which are generally well owned, and our aim is to highlight quality stocks that are relatively underappreciated,” they said, naming three of their top ideas.

— Amala Balakrishner

‘Significant corrections’ followed stock markets this stretched in the past, Deutsche Bank says

The stock market has always pulled back when valuations are stretched as they are now, according to Deutsche Bank macro strategist Henry Allen in a note to clients this week.

″[T]urning points can happen quickly, and … when valuations are stretched to start with, there can be limited scope for further gains,” Allen noted. ”[E]xamples of high returns through history have often been followed by sizeable reversals.”

The bank cited lofty current readings in the Cyclically Adjusted Price-to-Earnings (CAPE) ratio developed by economist Robert Shiller, arguing that “the CAPE ratio for the S&P 500 has only been higher on two other occasions in the last century” than it is today.

During the dot-com bubble of the late 1990s and the period before the Global Financial Crisis in 2008, “there was little scope for further gains since valuations were already so stretched to start with, and they were each followed by a significant correction,” Allen wrote. “Indeed, on both the occasions the CAPE ratio has got as high as it is today, there was then a significant correction.”

— Scott Schnipper

Fed Governor Bowman says inflation progress has ‘stalled’

Federal Reserve Governor Michelle Bowman said Wednesday that progress on bringing inflation back to the central bank’s goal has slowed.

“We have not yet met our inflation goal and, as I noted earlier, progress in lowering inflation appears to have stalled,” Bowman said in remarks in West Palm Beach, Florida. “I see greater risks to the price stability side of our mandate, especially while the labor market remains near full employment, but it is also possible that we could see a deterioration in labor market conditions.”

Recent data has indicated that the Fed has neared its 2% inflation target, though the all-items consumer price index nudged higher in October and the core rate indeed has held steady around 3.3% since August.

Inflation concerns caused Bowman to vote against the half-percentage-point interest rate cut in September, though she did vote for the quarter-point reduction earlier this month, which she would have preferred for the initial move. The policymaker said she approaches her role “in an independent way, relying on facts, analysis, my own experience and judgment,” and with the inflation mandate in mind.

“In some cases, this approach has led me to depart from the views of my colleagues,” she said.

— Jeff Cox

Fed Governor Cook expects more rate cuts as inflation eases

Federal Reserve Governor Lisa Cook said Wednesday that she sees inflation continuing to ease while the labor market “remains solid” despite some recent signs of weakness.

Consequently, she expects the central bank to continue lowering its benchmark interest rate, though the path ahead is uncertain.

“Going forward, I still see the direction of the appropriate policy rate path to be downward, but the magnitude and timing of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” Cook said in remarks at the University of Virginia.

While inflation, particularly at the core excluding food and energy, remains above the Fed’s goal, she expects progress to continue as housing services prices, such as rent, slow their ascent.

— Jeff Cox

Source : cnbc