New York (AFP) – The tech-rich Nasdaq was back in retreat Thursday as lingering worries over the artificial intelligence boom overshadowed strong Nvidia results while leading bourses in Asia and Europe hit fresh records. All eyes had been on chip giant Nvidia, which reported Wednesday night that quarterly profits more than doubled to $43 billion as it projected more strong growth for the coming period. While trading in Nvidia was initially volatile, investors ultimately turned on the stock, leaving it down 5.5 percent at the end of Thursday’s session.
“It says a lot when a stock market darling beating revenue forecasts by billions of dollars can no longer muster a positive share price reaction,” said Dan Coatsworth, head of markets at AJ Bell. “The mood music is changing on Nvidia, and it represents a significant shift in investor sentiment,” he added. The results come at a brittle moment for tech equities, which have suffered intermittent rounds of selling in recent days as markets weigh worries about whether massive capital spending on AI will prove profitable and the risk that incumbent technology companies could suffer.
Nvidia’s “results by themselves were good, but we have to keep in mind that hyperscalers are spending way more than they’re bringing in,” said Jack Ablin of Cresset Capital Management. Investors are worried because slowing spending will “impact everyone along the chain,” Ablin said. “And Nvidia is obviously a big beneficiary of all that spending.” While the Dow eked out a tiny gain, the Nasdaq finished down 1.2 percent, snapping a two-day rally in which worries about AI appeared to recede.
Meanwhile, major European indices advanced. London set a fresh record, boosted by a 4.5 percent rise in Rolls-Royce shares after the British engine-maker upgraded its guidance, announced a share buyback, and posted soaring annual profits. Paris’s CAC 40 index crossed the 8,600 level for the first time and Frankfurt also rose. In Asia, Tokyo hit a new record, while Hong Kong edged down and Shanghai was flat. Seoul climbed more than three percent to a fresh peak on Thursday, led again by surges in Samsung and rival chipmaker SK hynix. The Kospi index is now up nearly 50 percent already this year.
On currency markets, the yen clawed back some losses against the dollar that came after it emerged that Japanese Prime Minister Sanae Takaichi had nominated two academics to the Bank of Japan board who are considered policy doves. That came after earlier reports had said she had told the central bank’s boss Kazuo Ueda of her concern about hiking interest rates further.
Among individual companies, shares in multinational automaker Stellantis, which makes brands such as Jeep and Fiat, climbed six percent as trading got underway in New York. The company posted a net loss of 22.3 billion euros ($26.3 billion) for last year, but it was mostly due to write-downs of assets as the carmaker shifts away from electric vehicles.
– Key figures at around 2115 GMT –
New York – Dow: UP less than 0.1 percent at 49,499.20 (close)
New York – S&P 500: DOWN 0.5 percent at 6,908.86 (close)
New York – Nasdaq Composite: DOWN 1.2 percent at 22,878.38 (close)
London – FTSE 100: UP 0.4 percent at 10,846.70 (close)
Paris – CAC 40: UP 0.7 percent at 8,620.93 (close)
Frankfurt – DAX: UP 0.4 percent at 25,289.02 (close)
Tokyo – Nikkei 225: UP 0.3 percent at 58,753.39 (close)
Hong Kong – Hang Seng Index: DOWN 1.4 percent at 26,381.02 (close)
Shanghai – Composite: FLAT at 4,146.63 (close)
Dollar/yen: DOWN at 156.11 yen from 156.37 yen on Wednesday
Euro/dollar: DOWN at $1.1799 from $1.1810
Pound/dollar: DOWN at $1.3489 from $1.3559
Euro/pound: UP at 87.47 pence from 87.10 pence
West Texas Intermediate: DOWN 0.3 percent at $65.21 per barrel
Brent North Sea Crude: DOWN 0.1 percent at $70.75 per barrel
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© 2024 AFP
