LONDON (Aug 29): European shares shrugged off Wall Street's disappointment at 'Magnificent 7' top dog Nvidia's results on Thursday, while the euro and bond yields fluttered lower as German and Spanish inflation data trickled in.

With a sprightly 0.4% gain on the board, the pan-European STOXX 600 index was pushing to regain the record highs it set in mid-June before being savagely hit in a global rout earlier this month.

A near 1% rise in the region's tech shares led the way as traders swerved Wednesday's 7% after-hours slump in AI darling Nvidia's shares after it published results that left some investors unenthused.

Despite a third-quarter revenue forecast of US$32.5 billion (RM140.1 billion) surpassing Wall Street's expectations, its second-quarter revenue outperformance was the smallest relative to analysts' forecasts in six quarters.

"This wasn’t the sort of massive beat that Nvidia has often reported over the last 18 months," Deutsche Bank strategist Jim Reid said.

There were plenty of other things for traders to digest though.

The benchmark gauge of European borrowing costs, the German 10-year Bund yield, fell after data from six key German states pointed to a noticeable decline in the national inflation rate this month.

Spain's annual inflation rate dropped to 2.4% too, its slowest pace in a year, and US weekly jobless claims, which have gained prominence given the Federal Reserve's (Fed) focus on the health of the labour market, are also due later in the day.

Asian markets had a tricky session overnight. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3%, with South Korea's and Taiwan's markets dropping 1% and 0.7% respectively as their big chip and tech stocks felt the Nvidia chill.

"Nvidia, in some ways, has become a victim of its success, its share price soaring over 180% this year and after beating earnings now in 14 of the past 15 quarters," said Tony Sycamore, analyst at IG.

"Whether today's results signal the end of investors' strong affinity for the chipmaker remains to be seen. However, at the very least, the post earnings reaction does suggest it's an excellent time to consider diversifying."

China's blue chips ended lower for a fourth session as disappointing results from Chinese companies highlighted the country's frail economic recovery. UBS on Wednesday cut its 2024 GDP growth forecast for China to 4.6% from 4.9%.

Chinese battery maker CATL fell 1.1% after two top Republican lawmakers sought to have the firm added to a restricted list of companies allegedly working with Beijing's military.

US National Security Adviser Jake Sullivan is wrapping up three days of talks in Beijing intended to ease simmering tensions between the two superpowers.

Currency markets were gyrating in Europe.

The euro swooned back below to US$1.11 following the German and Spanish inflation data, having failed to break a major resistance level of US$1.12 in recent days.

There was a gaggle of key central bankers speaking too, including ECB chief economist Philip Lane and Fed Atlanta President Raphael Bostic.

Bostic on Wednesday said it may be "time to move" on rate cuts, but that he wanted to see confirmation from the jobs reports and two inflation reports before the September meeting.

The dollar steadied above more than one-year lows, undermined by expectations of imminent Fed rate cuts. Futures have fully priced in a quarter-point cut next month, and even imply a 35% probability of a half-point easing.

The second estimate of second-quarter US GDP was also due later. Deutsche Bank's Reid said though backward-looking, it would include the latest revisions to core PCE inflation.

"Any revisions to that would add to the uncertainty when it comes to tomorrow’s core PCE print for July, so that could have implications for the 25 bps vs 50 bps (Fed cut) debate depending how that looks," he said.

US Treasury yields were mostly quiet, although the inverted curve between two- and 10-years came within a whisker of turning positive. That would be the first time since July 2022, barring the brief un-inverting during the Japanese market crash earlier this month.

Gold climbed again and was just shy of scaling another peak. Gold prices were up 0.6% at US$2,517.73 an ounce, just a touch below their record of US$2,531.6.

Oil sagged again, adding to two straight sessions of declines as concerns about demand from China and the US countered supply disruptions out of Libya.

Brent crude futures were down 0.3% at US$78.35 a barrel, having fallen more than 3% in the past two days, while US West Texas Intermediate crude futures dipped 0.5% to US$74.18.

Uploaded by Chng Shear Lane