Morning wrap (04.09.2024)

The Asia-Pacific indices are recording a bearish session. The Chinese market is down by approximately 0.70%, Japan's Nikkei 225 index is losing 1.70%, and futures contracts for Singapore's SG20cash index are trading 0.65% lower.

The declines on Asian stock markets are driven by the lower closing on Wall Street, particularly a 3.80% drop in the U.S. technology index US100. The sell-off was fueled by negative sentiment in the semiconductor sector, including Nvidia (NVDA.US).

Nvidia's shares fell by 9.53% on Tuesday, marking one of the largest single-day drop in the company's history. Nvidia lost $279 billion in market capitalization due to news of an investigation launched by the U.S. Department of Justice into antitrust practices in AI. 

The antitrust authority had previously sent out questionnaires, and now it has issued legally binding requests to Nvidia. Officials are concerned that the chip manufacturer is hindering the transition to other suppliers and penalizing buyers who do not exclusively use its chips.

Futures contracts on European indices also point to a lower opening of the cash session. The DAX and UK100 are trading approximately 0.50-0.60% higher.

One of the weaker currencies today is the Australian dollar, along with the New Zealand dollar. Both currencies are down by around 0.30-0.40%. In contrast, the JPY yen is one of the stronger currencies, with USDJPY losing 0.25% to 145.1000.

Australia's GDP report for the second quarter of this year showed that the economy grew by 0.2% in Q2, unchanged for the third consecutive quarter. The result was slightly below market expectations of 0.3%. Annual growth slowed to 1.0% from 1.2% in the previous quarter.

The Australian economy is stuck in a slow growth phase in the June quarter. High interest rates and persistent inflation have effectively reduced consumer spending and slowed the economy.

Growth in China's services sector slowed in August despite the summer travel peak. The PMI index for the services sector fell to 51.6 in August from 52.1 in July. Despite the slight decline, the data still indicate a period of expansion, remaining above the 50-point threshold.

Bitcoin is also deepening its decline to $56,500, losing 1.70% today. Ethereum is seeing even greater losses of 2.00% to $2,370.