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Asian Stocks Drop as Tech Selloff Deepens Ahead of Nvidia Earnings

Asian Stocks Drop as Tech Selloff Deepens Ahead of Nvidia Earnings. Source: Image by Gerd Altmann from Pixabay

Asian stocks tumbled on Tuesday, driven by a sharp decline in technology shares ahead of Nvidia's highly anticipated earnings. Hong Kong’s Hang Seng index led losses, dropping 2% as investors took profits after a strong tech-driven rally. Japan’s Nikkei 225 fell 0.9%, while Taiwan Semiconductor Manufacturing Co. (TSMC), a key Nvidia supplier, slid 1.4%, dragging the Taiwan Weighted index lower.

Investor caution intensified following a Bloomberg report that the Biden administration may tighten restrictions on chip exports to China. This came after former U.S. President Donald Trump vowed to increase scrutiny on Chinese investments in critical U.S. sectors, escalating trade tensions. Concerns over Trump's proposed 25% tariffs on Canadian and Mexican imports also weighed on sentiment.

China’s markets struggled as the Shanghai Shenzhen CSI 300 and Shanghai Composite declined 0.9% and 0.5%, respectively. The initial boost from China’s AI-driven optimism faded, particularly after the January debut of DeepSeek.

South Korea’s KOSPI fell 0.4%, cushioned by the Bank of Korea’s 25-basis-point rate cut, marking the third easing in its current cycle. However, major tech stocks still faced pressure, with chipmaker SK Hynix sliding 2.2%.

Australia’s ASX 200 lost 0.6%, extending its retreat from record highs, while Singapore’s Straits Times index remained flat after lower-than-expected inflation data. Indian markets also pointed to a weak open amid growing losses.

Meanwhile, Japan’s TOPIX shed 0.2%, but gains in trading houses, fueled by Warren Buffett’s investment in Itochu, Marubeni, Mitsui, Sumitomo, and Mitsubishi, helped limit losses.

With Nvidia set to report earnings Wednesday, investors remain on edge, watching for signals on AI-driven demand in the tech sector.

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