Emerging Markets Hit by Nvidia's AI Letdown and Mixed Currency Movements

Emerging markets saw a dip in stock performance on Thursday, driven by falling chipmaker stocks after Nvidia's disappointing quarterly results. Currency movements were mostly muted, except for slight gains in the Chinese yuan and South African rand. Focus remains on upcoming U.S. economic data, including jobless claims and the PCE index.

Emerging markets took a hit on Thursday as stocks with significant chipmaker exposure fell, following Nvidia's underwhelming quarterly results. By 0830 GMT, the MSCI index for emerging market stocks was down by 0.3%, with South Korean and Taiwanese bourses each dropping nearly 1%, led by chip-making firms.

Nvidia's failure to meet high investor expectations, fueled by the ongoing AI revolution, contributed to the selloff. "Investors tend to overstate the importance of one set of quarterly results in the grand scheme of AI," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. Meanwhile, European emerging markets showed gains, with Prague stocks up by 0.7%.

Currency markets showed modest movements, with the Chinese yuan reaching a seven-month high and South Africa's rand rising by 0.6%. The focus is now on U.S. jobless claims and the Fed's PCE index, which may provide clues on future interest rate cuts. Elsewhere, Kazakhstan maintained its interest rate at 14.25% due to rising inflationary risks.

(With inputs from agencies.)