Equities cautious ahead of more rate indications; China continues to rebound

The majority of Asian markets fell on Wednesday, mirroring Wall Street's overnight losses as risk appetite weakened ahead of further Federal Reserve signals and significant earnings from NVIDIA, the world leader in artificial intelligence.

On the other hand, Chinese markets experienced prolonged increases as they continued their five-year low recovery. Support also seemed to be coming from the People's Bank of China's larger-than-expected interest rate decrease on Tuesday.

Tuesday's Wall Street indexes finished down, and Wednesday's Asian trade saw a decline in futures as a significant amount of profit-taking in the technology sector was sparked by some concern around chipmaker Nvidia's quarterly reports.

The Nikkei 225 index in Japan dropped 0.4%, continuing its decline for a third session in a row following the index's spike to 34-year highs earlier this month. The largest decliners in technology equities were chipmakers and chip-related firms, which fell in tandem with Nvidia's overnight losses.

According to data, Japanese exports increased significantly in January compared with a sharp decline in imports.

Over in the UK, the FTSE 100 stopped a four-day winning streak yesterday, and is expected to open little higher on Wednesday morning.

Some market mood will be influenced by HSBC's earnings this morning. The largest bank in Europe saw its shares tumble 3% in Hong Kong following the announcement of data that showed fourth-quarter profits had dropped by just over 80% to $1 billion.

The sale of the retail banking operations in France, a further write-down on commercial real estate, and a $3 billion impairment charge related to an investment in the affiliate Chinese bank BoCom were the main drivers of this.

Positively for investors, the board committed to a $2 billion share repurchase and authorised a fourth interim dividend of $0.31 per share, for a total of $0.61 per share for 2023.

Chief Executive Noel Quinn stated that the year's profits increased by nearly 80% to $30.3 billion, a record performance that "enabled us to reward our shareholders with our highest full-year dividend since 2008, three share buy-backs last year totaling $7bn, and a further share buy-back of up to $2bn." This demonstrated the robustness of our balance sheet in the face of increased interest rates and four years of diligent effort."

(Sources: investing.com, reuters.com, proactiveinvestors.co.uk)