China Stocks on 3-Session Decline

The Shanghai Composite lost 14 points or 0.3% to 3,958 in early deals on Tuesday, while the Shenzhen Component fell slightly to 13,188.

Both indexes fell for the third straight session as the Taiwan Strait row deepened, with Beijing ruling out talks with Tokyo at the upcoming G20 summit in South Africa.

Most sectors were lower amid caution ahead of China’s monthly key lending rate fixing later this week, following the PBoC’s decision to hold rates at record lows in October.

Weakness in U.S. markets also weighed, reflecting concern ahead of Nvidia’s earnings amid lofty AI valuations, alongside uncertainty over the Fed’s interest rate path as Vice Chair Philip Jefferson flagged downside risks to the labor market.

Notable laggards included Agricultural Bank of China (-1.8%), Foxconn Industrial Internet (-1.4%), and Luxshare Precision Industry (-1.1%).

In contrast, Cambricon Technology (1.8%), Hygon Information Technology (1.0%), and Kweichow Moutai (0.8%) posted gains.

Hong Kong equities slipped 349 points or 1.3% to 26,039 in early Tuesday trade, extending losses for a third session and approaching a two-week low.

A downbeat lead from Wall Street weighed on sentiment, reflecting uncertainty over interest rates and upcoming tech earnings.

Nvidia’s results on Wednesday are drawing intense scrutiny amid unease over lofty AI valuations, even as the chipmaker is expected to beat forecasts.

Investors also awaited the delayed September U.S. jobs report, now due Thursday after the shutdown.

Geopolitical tensions added pressure after China warned its citizens against traveling to Japan and ruled out a leaders’ meeting at the upcoming G20 summit in South Africa.

Still, losses were partly limited by expectations that the PBoC will keep key lending rates at record lows for a sixth straight meeting to support the weak economy.

All sectors declined, with notable laggards including XPeng (-8.6%), China Hongqiao Group (-4.8%), Lenovo (-4.0%), and Xiaomi (-2.4%).

The benchmark KOSPI dropped 1.97% to around 4,008 on Tuesday, reversing gains from the previous session as significant losses in technology and auto stocks weighed on the index.

Tech heavyweights Samsung Electronics dropped 1.5% and SK Hynix plunged 4.95%, while auto-makers Hyundai Motor and Kia Corporation fell 1.29% and 1.45%, respectively.

The downturn in Korean equities largely tracked the overnight losses in US technology shares, as investors turned cautious ahead of Nvidia’s earnings release on Wednesday, which is expected to shed light on demand trends in the artificial intelligence sector.

Meanwhile, shipbuilders were among the top performers, with HD Hyundai Heavy Industries climbing 2.8% and Hanwha Ocean rising 1.1%.

In addition, Naver Corporation edged 0.2% higher after the company showcased its latest technological developments, including AI applications for the construction and real estate industries.

The Nikkei 225 Index fell 1.8% to around 49,428, hitting its lowest level since October 24, while the broader Topix Index dropped 1.2% to 3,306 on Tuesday morning, extending losses from the previous two sessions.

The decline tracked a weak Wall Street session overnight amid a key round of tech earnings.

Traders were also cautious ahead of a meeting between Japanese Prime Minister Sanae Takaichi and Bank of Japan Governor Kazuo Ueda, as well as a meeting between Takaichi and the government’s tax commission this afternoon.

Takaichi will launch talks this week on a wide-ranging tax overhaul aimed at supporting investment and household spending while seeking new revenue sources to maintain fiscal discipline, the Nikkei reported on Tuesday.

Most sectors traded in the red, led by tech stocks, with notable losses from Sumitomo Electric Industries (-6.8%), Furukawa Electric (-6.5%), Fujikura (-6.3%), and BayCurrent Inc. (-5.6%).

The S&P/ASX 200 dropped 1% to 8,548 on Tuesday, hitting a fresh four-month low as market sentiment remained subdued following the release of the Reserve Bank of Australia’s latest meeting minutes.

The RBA continued to adopt a cautious, data-dependent approach, with policymakers weighing the implications of a recent uptick in inflation and assessing labor-market resilience.

The central bank has already delivered 75 basis points of cuts in its current easing cycle, bringing the cash rate to 3.60%, its lowest level since April 2023.

Market pricing currently suggests only a slim probability of an additional rate cut in 2025, while most economists expect easing to resume around May 2026.

Financials weighed on the index, with Westpac Banking Corporation shedding 2%, Commonwealth Bank of Australia falling 1.6%, and National Australia Bank down 1.3%.

Elsewhere, mining majors also declined, with BHP Group down 2.1%, Rio Tinto off 1.5%, and Fortescue falling 0.8% amid lower commodity prices.

U.S. stock futures edged higher on Tuesday after Wall Street closed sharply lower Monday, as sentiment toward the AI trade deteriorated ahead of Nvidia’s earnings due Wednesday.

The report will be closely watched amid anxiety over stretched AI valuations, even as many expect the chipmaker to once again beat forecasts.

Caution deepened after filings showed Peter Thiel sold his nearly USD 100 million stake in Nvidia.

Investors also awaited earnings from Target and Walmart, along with a batch of delayed U.S. economic data, including the September jobs report, ahead of the Fed’s next meeting.

Fed Vice Chair Philip Jefferson flagged downside risks to the labor market and stressed a careful policy approach.

In corporate news, Berkshire Hathaway acquired 17.9 million Alphabet shares in Q3 while trimming holdings in Bank of America and Apple.

Meanwhile, Ford reached a deal with Amazon to sell certified used cars on the e-commerce giant’s platform, becoming the second major automaker to do so.