Asian equities declined as sentiment soured by the US-China trade

Thursday saw a decrease in most Asian stocks, with Chinese markets leading losses as it seemed that a trade war with the United States was intensifying. Fears of rising interest rates also affected investor mood.

Nevertheless, a few semiconductor stocks increased in tandem with Nvidia's profitable results.

Wall Street gave way to regional markets with a feeble lead-in overnight as the minutes of the Federal Reserve's meeting from late April revealed growing apprehension among decision-makers on sticky inflation. It appears that some authorities are willing to raise interest rates even more in order to reduce inflation, which is not good news for risk-averse stock markets.

U.S. stock index futures increased during Asian trading, driven up by NVIDIA's spectacular profits.

The Shanghai Composite and Shanghai Shenzhen CSI 300 indices in China fell by over 0.9% apiece on Thursday, declining even further from their peak levels reached in 2024.

Even more severe losses were seen by Hong Kong's Hang Seng index, which fell 1.8% after reaching a nine-month high in May.

Rekindled fears of a trade war with the United States drove China's losses, following President Joe Biden's administration's announcement that additional tariffs on around $18 billion worth of Chinese imports will go into effect on August 1.

Important emerging Chinese industries, such as semiconductors and electric cars, are the focus of the levies.

Beijing appears to have responded to the taxes by prohibiting some American corporations from engaging in commerce with China and from shipping certain weapons to Taiwan. Additionally, reports stated that regulatory monitoring was causing delays in Boeing's jet deliveries to China.

China's military exercises near Taiwan have unsettled sentiment toward the nation and have the potential to escalate tensions in the area.

The larger TOPIX climbed 0.4%, while Japan's Nikkei 225 index increased by 0.8%.

According to PMI statistics, Japan's manufacturing sector expanded for the first time in eleven months, which increased total activity.

However, the largest forces behind Thursday's increases in Japanese markets were technology sectors, particularly chipmakers.

While chipmakers climbed on solid results and outlook from Nvidia, which confirmed optimism that demand from the artificial intelligence industry remained robust, Asian technology equities witnessed moderate gains.

Leading Nvidia supplier TSMC increased by 1.2% in Taiwan, while Hon Hai Precision Industry, popularly known as Foxconn, increased by 1.5%.

(Sources: investing.com, reuters.com)