Asia stocks edge lower despite stronger China growth as AI jitters persist

Investing.com -- Asian stocks edged lower on Monday, although stronger-than-expected Chinese growth helped mainland markets pare losses. Concerns over AI financing and profitability continued to weigh on technology shares ahead of a busy week of corporate earnings.

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China's economy grew 4.5% year-on-year in the third quarter, slightly exceeding expectations and improving the likelihood that Beijing will meet its annual growth target. Retail sales rose 1.1%, beating forecasts, while industrial output expanded 5.5%, in line with estimates.

Mainland Chinese equities pared earlier losses, with the Shanghai Composite up 0.2% and the CSI 300 gaining 0.1%. The MSCI Asia-Pacific index slipped around 0.3%, paring a steeper earlier decline. Hong Kong markets were closed for a public holiday.

U.S. equity futures rebounded, with Nasdaq 100 futures rising 1.3% and S&P 500 futures gaining 0.8%, offering some relief after Friday's Wall Street selloff.

Japan's Nikkei 225 fell 0.8%. South Korea's KOSPI rose 0.6%, while Taiwan's semiconductor-heavy market remained under pressure.

Technology shares remained mixed across the region. South Korea's Samsung Electronics rose 0.8%, while SK Hynix fell 0.7%. Japan's Kioxia gained 1.3%, but TDK declined 1.3% and Murata Manufacturing lost 2.4%. Taiwan Semiconductor Manufacturing Co. fell 0.6%.

China's memory-chip maker ChangXin Memory Technologies (CXMT) plunged 7.6%, reversing recent gains amid concerns that its progress in next-generation DRAM could intensify competition with established memory producers.

The moves followed a punishing week for global chip stocks, with the Philadelphia Semiconductor Index falling 11.4% in its longest losing streak since 2008.

CoreWeave's debt burden has become a focal point of the selloff, with concerns about its financing contributing to sharp declines across AI-linked stocks. The market reaction has persisted even as major suppliers report strong results and guidance.

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Anna Wu, investment strategist and founder of Floodline Research, said investors remained focused on rising Chinese competition and the global technology selloff despite continued strength in memory demand.

She said DDR5 prices have risen 79% this year and 4.5% this month, with no memory makers flagging weaker demand despite the selloff.

Wu added that sustained fundamental strength would eventually attract attention again, but only after market panic subsided. That would require inflation concerns to ease or at least stop intensifying.

Elsewhere Indonesia's stocks extended their selloff, with the Jakarta Composite down over 5% after last week's historic plunge following MSCI's warning that it could remove the country from its emerging-market classification.

Australia's S&P/ASX 200 rose 0.3%, while New Zealand's NZX 50 fell 0.7%. Singapore's Straits Times Index gained 0.4%, while India's Nifty 50 dropped 0.4%.

Results from U.S. megacap companies this week are expected to test confidence in the AI trade following its recent setbacks.

Netflix reports on Tuesday, while Tesla, Meta Platforms and IBM are scheduled to report on Wednesday.

Other companies due to report include semiconductor equipment maker Lam Research, Texas Instruments, Procter & Gamble, General Motors and GE Aerospace, as well as Elon Musk-led companies SpaceX and Tesla.

Investors are also watching the potential spillover from accelerating U.S. inflation and technology-market volatility. Persistent fuel and food price pressures are complicating the outlook for central banks, while a gauge of bond-market volatility remains elevated.

Oil prices fell as traders balanced renewed fighting in the Middle East against signs that regional supplies were holding near pre-war levels.

The decline followed U.S. President Donald Trump's indication that some sanctions on Russian oil shipments could be waived, although he later said a final decision had not been made.

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