Hong Kong, September 4 — Asian stock markets experienced a sharp decline on Wednesday, following Wall Street’s biggest selloff since early August. The downturn was exacerbated by Nvidia’s significant 9.5% drop, which led to a global slump in chip-related stocks.
In Asia, Japan’s Nikkei 225 bore the brunt of the losses, plummeting 4.2% to close at 37,047.61. The decline was particularly severe for electronics and semiconductor companies, with Tokyo Electron falling 8.6%. South Korea’s Kospi dropped 3.0% to 2,583.70, with tech giant Samsung Electronics down 3.2%. Taiwan’s Taiex slid 4.5%, largely due to a 5.4% fall in Taiwan Semiconductor Manufacturing Company (TSMC) shares.
Australia’s S&P/ASX 200 fell 1.9% to 7,950.50. Despite data showing a 1% GDP growth for the second quarter of 2023—slightly above expectations—investor sentiment remained cautious. In Hong Kong, the Hang Seng Index declined 1.3% to 17,429.30, while the Shanghai Composite Index edged down 0.6% to 2,787.20.
U.S. futures also pointed lower, reflecting broader concerns. Oil prices fell as Libya approached a resolution to its oil revenue dispute, potentially increasing oil production. Benchmark U.S. crude dropped 46 cents to $69.88 a barrel, while Brent crude fell 31 cents to $73.44 a barrel.
The weak performance of China’s economy, the world’s largest crude oil importer, added to the uncertainty. Recent data highlighted ongoing issues in the real estate sector and sluggish consumption, raising doubts about future oil demand.
Nvidia’s substantial decline was a major factor in the global tech stock downturn. Despite surpassing expectations in its latest profit report, Nvidia’s stock fell 9.5% on Tuesday, leading to a broad decline in semiconductor-related stocks. This decline contributed to a 2.1% drop in the S&P 500, which had been on a three-week winning streak. The Dow Jones Industrial Average fell 626 points, or 1.5%, from its recent record, while the Nasdaq composite sank 3.3%, driven lower by Nvidia and other major tech stocks.
In the bond market, Treasury yields fell following a report indicating a contraction in U.S. manufacturing for August. The yield on the 10-year Treasury dropped to 3.84% from 3.91% late last week, down from 4.70% in late April.
Looking ahead, upcoming reports on U.S. job openings and service sector growth, culminating in Friday’s employment report for August, will be crucial for gauging the economy’s strength.
In currency markets, the U.S. dollar was trading at 145.11 Japanese yen, down from 145.47 yen, while the euro increased to $1.1054 from $1.1043.
Stay tuned for further updates as the economic landscape continues to evolve.
