Asian stock markets presented a mixed picture during Wednesday's trading session, as lingering losses in US technology stocks continued to cast a shadow over investor sentiment. Meanwhile, precious metals like gold and silver staged a significant rebound, attracting flows as investors sought refuge in traditional safe-haven assets amid ongoing market uncertainties.
Divergent Moves Across Key Asian Indices
In Hong Kong, the Hang Seng Index (HSI) was down by 26 points, trading at 26,807 around 10:55 am IST. Japan's Nikkei 225 experienced a more pronounced decline, falling over 539 points or 0.99% to settle at 54,180. Mainland China markets also faced pressure, with the Shanghai composite dipping 0.02% and the Shenzhen index dropping 1.06%.
Contrasting this trend, South Korea's Kospi index jumped over 1%, reaching 5,349. However, even within this gain, technology-linked stocks exerted a drag. Notable decliners included chipmaker Tokyo Electron, which slid 2%, and testing equipment firm Advantest, down 1.6%. SoftBank Group managed to edge up 0.2%, moving against the broader negative trend for tech.
Nintendo's Sharp Decline Despite Strong Profits
A standout mover was Nintendo, whose shares slumped more than 10%. This sharp fall occurred despite the company reporting strong profits just a day earlier. The sell-off primarily reflected growing concerns among investors and analysts about whether the sales momentum for the Switch 2 gaming console, introduced last year, can be sustained over the longer term.
Precious Metals Rebound on Safe-Haven Demand
Gold and silver prices extended their recovery on Wednesday, supported by robust demand for safe-haven assets. This demand was fueled by a combination of heightened geopolitical tensions, a weaker U.S. dollar, and persistent uncertainty surrounding global trade tariffs.
Gold jumped 2.8% to $5,070.30 per ounce, while silver surged an even more impressive 4.8% to $87.29 per ounce. These gains followed steep losses earlier in the week. Gold had dropped below the $4,500 mark on Monday from nearly $5,600 last week, and silver had plunged more than 31% during Friday's trading session.
US Market Fallout and Tech Sector Pressure
Overnight in the United States, Wall Street closed sharply lower as technology stocks came under significant selling pressure. The broad S&P 500 index fell 0.8%, or 58.63 points, to 6,917.81. The Dow Jones Industrial Average declined 0.3%, or 166.67 points, to 49,240.99, while the tech-heavy Nasdaq Composite slid 1.4%, or 336.92 points, to 23,255.19.
Key tech giants faced notable declines. Nvidia dropped 2.8%, and Microsoft lost 2.9%. These moves partly reflected investor concerns over stretched valuations in the sector and growing questions about whether heavy corporate investments in artificial intelligence will generate sufficient returns in the future.
Earnings-Driven Volatility
Company-specific news also drove volatility. PayPal shares plunged 20.3% after reporting weaker-than-expected quarterly results. In contrast, Pfizer slipped 3.3% despite posting stronger-than-expected profits, indicating that positive earnings alone were not enough to buoy the stock in a risk-off environment.
Bond, Oil, and Currency Market Movements
In the bond market, the yield on the benchmark US 10-year Treasury note eased to 4.27% on Wednesday from 4.29% late Monday. The decline in yield, which moves inversely to price, signaled stronger investor demand for government bonds, another classic safe-haven asset.
Oil prices traded firmer during early Asian hours. The US benchmark, West Texas Intermediate (WTI) crude, rose 0.6% to $63.60 per barrel. The global benchmark, Brent crude, gained 0.5% to $67.66 per barrel. Analysts at ING Bank noted that prices were supported in part by renewed geopolitical tensions between the U.S. and Iran, following an incident where a U.S. Navy fighter jet shot down an Iranian drone flying close to a U.S. aircraft carrier.
In currency markets, the US dollar strengthened against the Japanese yen, moving to 156.25 yen from 155.72 yen. The euro edged slightly higher against the dollar, trading at $1.1824 compared to $1.1819 previously.
