Asian shares edge up on Nvidia hopes

Asian shares rose on Wednesday as investors awaited strong earnings from chipmaker Nvidia and monitored interest rate outlooks in the US and UK, Reuters reported.

The broader MSCI index of Asia-Pacific shares outside Japan rose 0.4 per cent, extending its gains to a fourth consecutive week and reaching a two-year high.

Markets are bracing for a volatile reaction after Nvidia reports earnings later on Wednesday. Options markets are pricing in a potential swing of 8.7 per cent in either direction, representing a $200 billion shift in market value for the company.

Analysts are unsure how much further Nvidia can grow, considering its already high profit margins (77 per cent) and a staggering 93 per cent stock price increase year-to-date.

“Sentiment is quite positive, with our bars well-above consensus and a sense that management has left some in the tank to surprise positively,” said JPMorgan analyst Josh Meyers.

Investors are also keeping a close eye on upcoming interest rate decisions from central banks. Minutes from the latest US Federal Reserve meeting are due later today, which could provide clues about the future path of monetary policy.

Fed fund futures suggest a 66 per cent chance of a rate cut by September, with expectations of 43 basis points of easing priced in for 2024.

Meanwhile, figures on UK inflation due later today will be crucial for determining whether the Bank of England eases policy as early as June or waits until August.

Forecasts predict core consumer price inflation to slow to 3.6 per cent in April, down from 4.2 per cent in March. A lower-than-expected figure could reduce the possibility of a June rate cut and potentially weaken the British pound.

Other Markets

• European stock futures nudged slightly higher, with EUROSTOXX 50 futures and FTSE futures up 0.1 per cent each. US stock futures remained relatively flat.
• The New Zealand dollar jumped 0.9 per cent to a one-month high of $0.6151 after the country’s central bank warned of keeping interest rates higher for longer to control inflation.
• The Japanese yen weakened, pushing the Nikkei index down 0.8 per cent as the weaker currency boosted exports but also raised concerns about imported inflation.
• The dollar gained slightly against the yen at 156.36, with Japanese intervention limiting its advance.
• Gold prices retreated to $2,413 an ounce after reaching a record high of $2,449.89 earlier this week.
• Oil prices fell on worries about peak season demand in the US, with Brent crude down 60 cents to $82.28 a barrel and US crude down 63 cents to $78.03 per barrel.