The Asia-Pacific markets experienced a significant plunge on Wednesday, with Japan’s Nikkei 225 taking the lead after U.S. tech stocks sold off. The Nikkei 225 was down 3.19%, marking the highest losses in the region. The Topix also suffered, dropping 2.79%. The semiconductor sector was hit particularly hard, with stocks like Renesas Electronics plummeting 8%, Tokyo Electron falling 7.04%, and Advantest tumbling over 7.7%. Softbank Group, which owns chip designer Arm, saw a decline of over 5.9%.
South Korea’s Kospi lost 2.17%, and the small cap Kosdaq experienced a nearly 3% loss. Chip giants Samsung Electronics and SK Hynix, both suppliers to Nvidia, recorded losses of 2.62% and 6.36%, respectively. In Taiwan, the Weighted Index dropped by 3.49%, with heavyweights like Taiwan Semiconductor Manufacturing Company and Hon Hai Precision Industry, known as Foxconn, falling over 3.5%.
Australia’s S&P/ASX 200 lost almost 1.70%, primarily driven by a weakness in oil prices. Despite the country’s second quarter GDP meeting expectations with a 1% year-on-year growth and 0.2% quarter-on-quarter, the market was still impacted by global trends. Hong Kong’s Hang Seng index saw the smallest loss in the region at 1.5%, while the mainland Chinese CSI 300 was down 0.47%.
In China, chip stocks also experienced some weakness, despite not being directly related to Nvidia’s supply chain. Semiconductor Manufacturing International Corporation, a state-linked company, saw a decline of 1.95%, while Hua Hong Semiconductor fell 1.06%. The Caixin services PMI for August revealed a slower expansion rate in China’s service sector, dropping to 51.6 from 52.1 in July.
The sell-off in U.S. tech stocks, particularly chipmaker Nvidia, had a ripple effect on global markets. Nvidia’s over 9% decline in regular trading dragged other chipmakers like Intel, AMD, and Marvell along with it. The VanEck Semiconductor ETF, which tracks semiconductor stocks, experienced its worst day since March 2020, down 7.5%. Additionally, the ISM manufacturing index for August came in at 47.2%, slightly below expectations, indicating a contraction in the percentage of companies reporting expansion.
Overall, the impact of U.S. tech stock sell-offs reverberated across the Asia-Pacific markets, causing significant losses in key sectors like semiconductors. The global sell-off in tech stocks underscored the interconnectedness of the financial markets and the need for investors to closely monitor international developments that can influence market trends. The uncertainty surrounding the economic outlook, particularly in the tech sector, has heightened concerns about a potential recession, further contributing to market volatility.
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