Asian equities began the week on a subdued note as high U.S. Treasury yields tested Wall Street's lofty valuations, keeping the U.S. dollar near multi-month highs. Market Performance : MSCI Asia-Pacific Index dipped 0.2% but remains 16% up for the year. Japan’s Nikkei slid 0.9%, still boasting a 20% annual gain. Chinese blue chips rose 0.3%, with most of their 16% yearly gain achieved after Beijing’s September stimulus promises. South Korea's index edged up 0.3% but is down 9% for the year, weighed by political uncertainties and events like Jeju Air’s recent plane crash. Global Futures : EUROSTOXX 50 futures gained 0.1%. U.S. futures saw slight declines, with S&P 500 and Nasdaq futures down 0.1%. Economic Drivers and Concerns U.S. Treasury Yields : Yields on 10-year Treasuries are near eight-month highs at 4.631%, up 75 basis points for the year. Rising yields reflect revised expectations of less restrictive monetary policy, raising concerns about potential impacts on corpo...
Cambricon Technologies Corp., a leading Chinese AI chipmaker, surged to its 20% daily limit on Monday, spurred by news that Beijing is increasing pressure on domestic firms to replace Nvidia Corp. processors with local options. The stock rally was part of a broader trend among semiconductor companies, with Semiconductor Manufacturing International Corp. (SMIC) rising nearly 20% in Shanghai and Naura Technology Group Co. climbing 9%.
Chinese regulators have advised companies against purchasing Nvidia’s H20 chips, which are crucial for developing and running AI models. This guidance aims to bolster domestic chipmakers while avoiding overt restrictions that could hinder local AI startups and escalate tensions with the US.
The Chinese government is intent on helping local AI chipmakers like Cambricon and Huawei Technologies gain market share, especially in light of potential future restrictions from the US. Earlier this year, Beijing also encouraged local electric vehicle manufacturers to source more components from domestic suppliers, aligning with its goal of achieving self-sufficiency in critical technologies.
In response to the regulatory shift, Nvidia's shares fell by 2% last Friday, reflecting the growing concerns about the company's market position in China.
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