Singapore, September 4 – Asian stock markets and global futures took a nosedive on Wednesday, driven by a significant decline in technology stocks and escalating fears about the global economic outlook. Oil prices also hit multi-month lows amid growing concerns about weakening demand.
Asian stock benchmarks bore the brunt of the selloff, with Tokyo’s Nikkei 225 and Taipei’s TAIEX both falling over 3%. The MSCI Asia-Pacific Index, which excludes Japan, dropped 1.8%. September, traditionally a challenging month for equities, saw exacerbated losses due to a combination of factors including lackluster U.S. manufacturing data.
Jason Teh, Chief Investment Officer at Vertium Asset Management, noted the increase in market volatility: “We had an initial taste of it at the beginning of August, and the recent macroeconomic catalysts have intensified fears of further economic slowdown.”
On Wall Street, stocks plunged sharply on Tuesday following the U.S. holiday weekend. Nvidia, a major player in artificial intelligence, saw its market value plummet by a record $279 billion as investor enthusiasm waned. This downturn rippled through Asian tech stocks on Wednesday, with Japanese chip-testing equipment manufacturer Advantest dropping 7%, Taiwan’s TSMC losing over 5%, and South Korea’s SK Hynix falling 7.7%.
U.S. stock futures also extended their decline, with S&P 500 futures slipping 0.55% and Nasdaq futures losing 0.74%. European futures followed suit, with EUROSTOXX 50 futures down more than 1% and FTSE futures falling 0.75%.
Vishnu Varathan, Head of Macro Research for Asia ex-Japan at Mizuho Bank, attributed the market turmoil to several factors: “There was plenty of blame to go around—Nvidia, tech sector weakness, soft U.S. data, and gloomy prospects for China.”
China’s economic struggles continue to weigh on global markets, with recent data suggesting that the world’s largest oil importer is still far from a robust recovery. This has led to further declines in oil prices, with Brent crude futures hitting a low of $73.14 per barrel and U.S. crude dipping to $69.72—both their lowest levels since December.
In other regional markets, Hong Kong’s Hang Seng Index fell 1.2%, China’s CSI300 blue-chip index dropped 0.4%, and Japan’s Nikkei 225 closed 3.86% lower.
Looking ahead, a series of U.S. economic reports due later this week, including job openings, jobless claims, and the nonfarm payrolls report, will be crucial. The Federal Reserve’s focus on the labor market means that Friday’s payrolls data could influence expectations for an upcoming rate cut.
Alex Loo, FX and Macro Strategist at TD Securities, remains optimistic: “We believe that fears of U.S. growth are overblown and anticipate a strong payrolls report on Friday.” Economists surveyed by Reuters forecast that the U.S. economy added 160,000 jobs in August, a rebound from July’s 114,000 increase.
In currency markets, safe-haven assets saw some movement. The yen gained 0.2% to 145.15 per dollar, while the euro fell to $1.1057. The Australian dollar weakened by 0.12% to $0.67035, pressured by falling commodity prices and sluggish economic growth in Australia.
In commodities, gold saw a modest increase of 0.11% to $2,495.66 an ounce.
Stay tuned for further updates as we continue to monitor these evolving market conditions.
