Asian equity markets experienced a sharp decline at the beginning of the week, primarily driven by significant losses in technology stocks amid growing apprehensions about U.S. economic performance. The MSCI Asia Pacific Index dropped by as much as 1.8%, reaching its lowest point in three weeks, with major technology firms such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. leading the decline. Japan’s Nikkei 225 Stock Average fell over 3% before recovering slightly, as the yen reversed its substantial gains from the previous week. In Taiwan, the key stock index saw a 2% decrease, while Hong Kong benchmarks were on track for their fifth consecutive day of losses.
The downturn was exacerbated by disappointing U.S. non-farm payrolls data released on Friday, which intensified concerns that the Federal Reserve is not acting swiftly enough to support the world’s largest economy. Investors are closely watching for indications of the Federal Reserve’s next rate cut, while the recent tightening of policy by the Bank of Japan has exerted upward pressure on the yen, heightening fears about the impact on carry trades.
Matthew Haupt, a portfolio manager at Wilson Asset Management International, suggested that risk assets could face further short-term declines as market positions are likely to be adjusted. “We anticipate that Japan will experience the most weakness at this stage, with broader market suffering to follow,” Haupt commented.
Chinese equities also faced pressure as Monday’s producer and consumer price data revealed persistent deflationary pressures. Recent downgrades of China’s stock market reflect growing skepticism about the country’s ability to meet its 5% GDP growth target for 2024.
Sector Highlights:
Chinese Medical Equipment: Stocks in this sector advanced following news that authorities will permit increased overseas investment to stimulate economic growth.
Asian Luxury Goods: Shares fell as European counterparts struggled amid worsening conditions in China.
Chinese Real Estate: Stocks of property developers, including China Vanke, declined sharply after the company reported a worsened sales slump in August.
Market Overview:
MSCI Asia Pacific Index: -1.6%
Japan’s Topix Index: -1.7%; Nikkei 225: -1.8%
China’s CSI 300 Index: -1.1%; Hong Kong’s Hang Seng Index: -1.9%; Hang Seng China Enterprises Index: -2.2%
Taiwan’s Taiex Index: -2%
South Korea’s Kospi Index: -0.7%; Kospi 200 Index: -1.1%
Australia’s S&P/ASX 200 Index: -0.6%; New Zealand’s S&P/NZX 50 Gross Index: -0.4%
India’s NSE Nifty 50 Index: -0.1%
Singapore’s Straits Times Index: +0.9%; Malaysia’s KLCI Index: +0.3%; Philippines’s PSEi Index: +0.7%; Indonesia’s JCI Index: -0.5%; Thailand’s SET Index: -0.4%; Vietnam’s VN Index: -0.5%
Notable Market Moves:
Samsung Electronics: Shares fell by up to 3.3% following downgrades by KB Securities and CLSA amid weaker demand for new technology products.
Akeso: Stock surged by up to 14% in Hong Kong after presenting new data on its lung cancer drug in collaboration with Summit Therapeutics.
Nio: Hong Kong-listed shares soared by up to 17% following strong second-quarter results and positive projections for free cash flow in the fourth quarter, according to Citigroup.
China Renaissance: Shares plummeted by 72% in Hong Kong upon resumption of trading after a year-long suspension.
Guzman y Gomez: Stock jumped by up to 7.8% following its inclusion in the S&P Dow Jones Indices.
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