Investing.com – Most Asian shares rose on Wednesday, led by gains in the technology sector, while Australian shares fell sharply as better-than-expected inflation data fueled fears of higher interest rates.
Regional markets took some positive cues from Wall Street, where a recovery in shares of major chip makers, particularly NVIDIA Corporation (NASDAQ:), helped stocks and ended higher. But worries about upcoming inflation numbers sent economically sensitive stocks lower and closed lower.
US stock index futures were muted in Asian trading.
Australian shares fall as high consumer price index raises fears of rate hikes
Australia’s index was the worst performer in Asia, falling 1% after hotter-than-expected inflation data for May.
The data increased expectations that the Reserve Bank of Australia could potentially raise interest rates in August. While the central bank did not directly mention the possibility of raising rates, its tone was more hawkish than markets had expected at its meeting last week.
Consumer price index readings on Wednesday showed inflation moving further away from the RBA’s annual target range of 2-3% – a scenario that is likely to prompt even more aggressiveness from the central bank. Australian bond yields also jumped following the release.
Nikkei and KOSPI supported by technological advances
The Japanese index was the best performer in Asia, rising 0.9%, led by gains in tech heavyweights, especially chip makers. Rising shares of chip makers also lifted South Korean shares 0.3%.
Shares of chipmakers rose following an overnight rebound in Nvidia shares as the artificial intelligence darling recovered from three days of sharp losses. Asian shares linked to the company also posted strong gains on Wednesday, with the Japanese index Advantest company. (TYO:) grew by 6.1%, and SK Hyniks Inc. (KS:) added 4.4%.
TSMC (TW:) (NYSE:), the world’s largest contract chipmaker, gained 1% in trade with Taiwan.
China stock market falls as trade tensions persist
China and indexes each fell 0.4%, while Hong Kong’s index rose marginally on Wednesday.
Sentiment toward China remained largely on edge amid concerns about a potential trade war with the West, especially after Beijing raised such a possibility in the face of European tariffs on imports of Chinese electric vehicles.
Trade war fears sent Chinese indices into sharp losses in June as sentiment over additional stimulus measures in the country also faded.
Among other Asian markets, India index futures opened moderately positive after the index and index rose to record highs on Tuesday. Renewed optimism about the Indian economy has been a key driver of equities’ gains in recent weeks as Indian markets have recovered following the 2024 general election results.