Nvidia probe weighs on tech stock rebound

Technology stocks partly recovered on Monday from losses tied to worries over possible AI regulation, but news of an Nvidia board probe into chief executive Jensen Huang added uncertainty to the sector.

Chipmakers and other companies linked to the artificial intelligence boom fell after Tuesday's US midterm elections, in which Democrats swept both chambers of Congress. The result fuelled speculation that the new Congress could try to restrain technology firms' data-centre construction drive.

Japan's Nikkei 225 rose 2.3 percent, helped by gains in Tokyo Electron, Advantest and Sony. Taipei rose more than four percent after Taiwan's government pledged support for the market, including curbs on short selling and backing from a US$15.2 billion stock stabilisation fund. Shanghai, Bangkok and Jakarta also gained.

Seoul gave up an early rally and ended 0.8 percent lower, with SK hynix and Samsung losing most of their gains. Hong Kong, Wellington, Manila and Mumbai also slipped, while London, Paris and Frankfurt opened lower.

Sally Auld of National Australia Bank said investors would watch whether the gains were short-covering, bargain hunting or the start of a more sustainable move. She said fears over AI regulation, capital expenditure and free cash flow were unlikely to be resolved soon, although many tech-stock valuations now looked less expensive.

Nvidia added to the uncertainty after its board was reported to be investigating whether Huang had been targeted in a foreign espionage plot following his admission that he was unfaithful to his wife.

The New York Times reported last month that US intelligence officials concluded that a Chinese executive linked to Singapore-based data centre company Megaspeed had been funnelling information to Beijing. The newspaper said the executive, Alice Huang, also known as Huang Le and not related to Jensen Huang, developed a close relationship with the Nvidia chief.

Technology analyst Dan Ives of Yorkville Ives said the matter would probably spark congressional inquiries and create an overhang for Nvidia's stock. He said it would also increase scrutiny over selling chips to China.

Oil prices extended losses on hopes for an end to the Iran war after the Democratic midterm victory. Investors were also watching for fresh US inflation data after figures Friday showed the economy created more jobs than expected in October. The source item said markets saw an 80 percent chance of a Federal Reserve rate increase in December.