Asian markets experienced a sharp downturn on Wednesday, with Japan’s Nikkei 225 and Taiwan’s Taiex leading the declines after a significant sell-off in U.S. tech stocks and disappointing economic data raised recession concerns.
Nikkei and Taiex Plunge
The Nikkei 225 fell 4.24% to end at 37,047.61, marking its worst single-day loss since August 5. The broader Topix index dropped 3.65% to 2,633.49. Taiwan’s Taiex was the hardest hit among Asian indices, plunging 4.52% to close at 21,092.75, with notable declines in major tech stocks including Taiwan Semiconductor Manufacturing Company (TSMC) and Hon Hai Precision Industry (Foxconn), which fell 5.21% and 3.51%, respectively.
South Korean and Japanese Tech Stocks Suffer
In South Korea, the Kospi index fell 3.15% to 2,580.8, while the Kosdaq index lost 3.76% to 731.75. Semiconductor giants Samsung Electronics and SK Hynix saw their stocks drop 3.31% and 8.02%, respectively. Japanese semiconductor-related stocks also faced severe losses, with Renesas Electronics plunging 8.50%, Tokyo Electron losing 8.55%, and Advantest tumbling 7.74%. SoftBank Group, which owns chip designer Arm, saw its shares fall 7.73%.
Impact on Australian and Chinese Markets
Australia’s S&P/ASX 200 declined 1.88% to 7,950.5, influenced by falling oil prices and mixed economic data. The country’s second-quarter GDP growth was 1% year-on-year, matching expectations but slightly missing the quarter-on-quarter forecast.
In Hong Kong, the Hang Seng index slipped 1.2%, while mainland China’s CSI 300 fell 0.58%. Despite being less affected by Nvidia’s supply chain issues, Chinese chip stocks also saw declines, with Semiconductor Manufacturing International Corporation down 1.95% and Hua Hong Semiconductor falling 1.06%. The Caixin services PMI for August indicated slower expansion in China’s service sector, dropping to 51.6 from 52.1 in July.
U.S. Market Influences
The sell-off in U.S. tech stocks had a domino effect on Asian markets. Nvidia’s stock plummeted over 9% in regular trading, dragging down other major tech companies like Intel, AMD, and Marvell. The VanEck Semiconductor ETF (SMH), tracking semiconductor stocks, dropped 7.5%, marking its worst day since March 2020. Additionally, the ISM manufacturing index for August came in at 47.2%, slightly above July’s 46.8% but below the 47.9% anticipated by Dow Jones, signaling ongoing economic concerns.
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