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Asian stocks and global stock futures tumbled on Wednesday, led by significant losses in technology shares, as renewed concerns over global growth drove investors away from riskier assets. Oil prices also hit multi-month lows, reflecting sluggish demand from the world’s top consumers, China and the United States.
Image Source: Reuters
Major stock indices in Tokyo (.N225) and Taipei (.TWII) fell more than 3%, contributing to a 1.6% drop in the MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS). September has traditionally been a challenging month for equities, and analysts cited multiple factors for the selloff, including weak U.S. manufacturing data.
The downturn followed a sharp drop in U.S. markets, where Nvidia (NVDA.O) lost a record USD 279 billion in market value as investors reined in their enthusiasm for artificial intelligence stocks. Chris Weston, head of research at Pepperstone, noted that “growth concerns were the key theme on the day, with cyclical-sensitive assets smacked and hedges laid down aggressively.”
Nvidia’s rout spilled over into Asian tech stocks, causing shares of Nvidia suppliers and other chipmakers to drop. Japan’s Advantest (6857.T), Taiwan’s TSMC (2330.TW), and South Korea’s SK Hynix (000660.KS) all faced significant losses.
Futures markets pointed to further declines, with S&P 500, Nasdaq, EUROSTOXX 50, and FTSE futures all sliding. Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Bank, pointed to “Nvidia, tech, soft spots in U.S. data, and China gloom” as key factors for the broad market retreat.
Concerns over a faltering Chinese economy, which remains sluggish and in need of further stimulus, weighed heavily on oil prices. Brent crude dropped to USD 73.14 per barrel, and U.S. crude fell to USD 69.72, both marking their lowest levels since December.
Other Asian markets were also down, with Hong Kong’s Hang Seng Index (.HSI) falling 0.9% and Japan’s Nikkei (.N225) down 3.3%.
The market’s focus is now shifting to a series of upcoming U.S. economic data releases, including job openings, jobless claims, and the crucial nonfarm payrolls report on Friday. Tony Sycamore, a market analyst at IG, noted, “Everyone’s been cheering on the idea of rate cuts, but the idea of having a rate cut isn’t a great thing because it means things are worse economically than what might have been the case.”
In currencies, safe-haven options like the dollar and yen held steady. Meanwhile, the Australian dollar faced pressure, and U.S. Treasury yields saw modest declines.
With concerns over global economic stability mounting, investors continue to adopt a cautious approach, focusing on safe-haven assets amid a turbulent market environment.
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