Investing.com – Asian stocks fell on Thursday, with pressure mainly from losses in the technology sector following disappointing guidance from market favorite Nvidia, although expectations of lower interest rates helped limit overall losses.

Declines in the technology sector were also relatively minor, as NVIDIA Corporation (NASDAQ:) still beat expectations with its quarterly results. Analysts remained optimistic about the company.

Regional markets were led weakly by Wall Street, with U.S. stock index futures falling in Asian trade as concerns about Nvidia rocked the technology sector. The and also declined from record highs.

Asian technology and chip makers fall after Nvidia

Asia’s technology-heavy stock exchanges performed the worst that day: the South Korean and Hong Kong stock exchanges and the index each lost around 0.8 percent.

Losses in the technology sector also pulled the Japanese stock market down 0.2 percent, while the US stock market lost 0.3 percent.

Losses in the technology sector mainly affected chipmakers, especially those with direct exposure to Nvidia, which fell as much as 8.5% in aftermarket trading.

Taiwan’s TSMC (TW:) (NYSE:) fell 2%, while Hon Hai Precision Industry Co Ltd (TW:), also known as Foxconn, lost 1.6%.

Memory chip manufacturer and important Nvidia supplier SK Hynix Inc (KS:) slipped 6%, while larger rival Samsung (KS:) lost 3%.

In Japan, chip testing equipment maker Advantest lost 0.5%, while Tokyo Electron lost 1.1%.

Semiconductor Manufacturing International Corp (HK:) – China’s largest chipmaker and local competitor to Nvidia – posted a slight decline.

Shares in the broader technology sector also fell as Nvidia’s gains sparked some concerns that the so-called “AI trade” that underpinned the sector last year was now losing further momentum.

Losses in the technology sector were also due to a broader shift away from the sector and toward more economically sensitive stocks as investors anticipated lower interest rates in the coming months.

General losses in Asia relatively low, interest rate cuts in focus

With the exception of the technology sector, losses in broader Asian markets were limited by purchases in sectors that are likely to benefit from lower interest rates.

Australia’s index fell 0.4 percent, benefiting from the lower weighting of technology stocks. The index also ignored a stronger-than-expected consumer price index published on Wednesday.

The indices for China fell 0.1% and 0.5% respectively, remaining at a six-month low, while there were few signs of an improvement in sentiment towards the country.

Futures for the Indian index pointed to a slightly positive opening after the index appeared to have continued to rise above the closely watched 25,000-mark. The Nifty and the were within spitting distance of new highs.

The Federal Reserve’s recent dovish comments reinforced expectations for a rate cut in September, which bodes well for equity markets. The focus this week is on US data and data – the Fed’s preferred inflation indicator – for further economic signals.