HONG KONG — Asian stock markets faced significant declines on Wednesday, following Wall Street’s steep drop, which marked its worst performance since early August. Notably, Nvidia’s stock plummeted 9.5%, contributing to a global downturn in semiconductor shares.
Japan’s Nikkei 225 index experienced a loss of 4.2%, closing at 37,047.61, leading the losses across the region. Tokyo Electron, a key player in the electronics and semiconductor sector, saw its shares fall by 8.6%. In South Korea, the Kospi index decreased by 3.0% to 2,583.70, with Samsung Electronics seeing a 3.2% decline. Taiwan’s Taiex index dropped by 4.5%, predominantly influenced by a 5.4% decrease in the Taiwan Semiconductor Manufacturing Company’s stock.
Australia’s S&P/ASX 200 index fell 1.9%, ending at 7,950.50, despite the country reporting a 1% GDP growth for the second quarter of 2023, surpassing analyst expectations. The Hang Seng index in Hong Kong finished down 1.3% at 17,429.30, and the Shanghai Composite index declined by 0.6%, closing at 2,787.20.
U.S. futures indicated further downturns, influenced by rising oil supply as Libya neared resolution of disputes over oil revenue control, potentially boosting oil production soon.
Benchmark U.S. crude prices dipped by 46 cents to $69.88 per barrel, while Brent crude, the international benchmark, fell by 31 cents to $73.44 per barrel.
Concerns about China’s economy, the largest crude oil importer globally, escalated after the release of disappointing economic data, exacerbated by a slump in the real estate sector and weak consumer spending.
The S&P 500’s largest component, Nvidia, faced substantial challenges, with a 9.5% drop on Tuesday, despite exceeding profit expectations in its latest report. This performance has intensified discussions around the robustness of Nvidia and other major tech stocks amid the recent AI technology boom. Overall, global semiconductor stocks experienced widespread declines on Wednesday.
On Tuesday, the S&P 500 dropped 2.1%, undoing some gains from a three-week rally that had brought it close to its all-time highs. The Dow Jones Industrial Average fell by 626 points, a decrease of 1.5%, while the Nasdaq composite dropped 3.3%, led by declines in Nvidia and other major technology stocks.
In the bond market, Treasury yields fell after a report indicated ongoing contraction in U.S. manufacturing for August, influenced by elevated interest rates. Manufacturing has been on a downward trend for most of the past two years, and the August figures were worse than anticipated by economists.
“Demand remains subdued, as companies remain hesitant to invest in capital and inventory amid current federal monetary policies and election uncertainties,” noted a representative from the Institute for Supply Management.
Later this week, additional economic reports are expected to shed light on how much support the economy requires, including data on job openings and service sector growth for the previous month. The week’s key highlight will likely occur on Friday, when a report detailing job creation by U.S. employers in August is released.
In closing, the S&P 500 fell by 119.47 points to 5,528.93. The Dow decreased by 626.15 points to 40,936.93, while the Nasdaq composite sank by 577.33 points to 17,136.30.
In the bond market, the yield on the 10-year Treasury note dropped to 3.84%, down from 3.91% late Friday, demonstrating a notable decrease from 4.70% in late April.
In foreign exchange markets, the U.S. dollar traded at 145.11 Japanese yen, down from 145.47 yen, while the euro rose to $1.1054 from $1.1043.
