Asian stocks fell broadly on Wednesday due to lingering Middle East tensions, shifting U.S. rate cut expectations and reports suggesting that the U.S. is mulling a cap on export licenses for AI chips to specific countries.
French luxury giant LVMH suffered its first quarterly sales drop since pandemic, fueling concerns about slowing demand in China and elsewhere.
Chipmaker shares led regional losses after Europe’s biggest tech firm ASML, whose customers include TSMC, Samsung and SK Hynix, warned of weak semiconductor demand.
The dollar hovered near two-month peaks versus major peers, driven by rising bets for a second Donald Trump presidency and expectations the Federal Reserve will proceed with modest interest rate cuts.
Markets currently see a 95 percent chance of a 25-bps rate cut from the Fed next month, after an aggressive 50-bps cut in September.
Atlanta Fed’s Raphael Bostic on Tuesday said he penciled in just one more interest-rate reduction of 25 basis points this year, while San Francisco Fed’s Mary Daly said “one or two” cuts in 2024 would be “reasonable”.
Gold edged higher for a second straight session to hover near a three-week high while oil recovered some ground after falling more than 4 percent on Tuesday.
China’s Shanghai Composite index finished marginally higher after a choppy session as investors awaited concrete details on stimulus plans.
It is believed a press briefing by China’s housing minister on Thursday will likely provide more details of measures to promote the “steady and healthy” development of the property sector.
Hong Kong’s Hang Seng index edged down 0.16 percent to 20,286.85 after a volatile session.
Japanese markets tumbled after Bank of Japan (BoJ) board member Seiji Adachi stated that monetary policy normalization is underway, but premature hikes should be avoided due to uncertainties in global economic outlook and domestic wage growth.
Investors also reacted to data showing machinery orders in Japan fell more than expected in August.
The Nikkei average slumped 1.83 percent to 39,180.30 while the broader Topix index settled 1.21 percent lower at 2,690.66. Chip-related stocks such as Tokyo Electron, Screen Holdings and Lasertec Corp fell 9-13 percent.
Seoul stocks fell notably, with the Kospi average falling 0.88 percent to 2,610.36. Samsung Electronics fell 2.5 percent and SK Hynix dropped 2.2 percent.
Australian markets closed lower as mining stocks took a hit due to prevailing growth concerns. Gold stocks surged, with Evolution Mining rallying 6.8 percent after releasing its production figures.
The benchmark S&P/ASX 200 slipped 0.41 percent to 8,284.70 while the broader All Ordinaries index ended down 0.49 percent at 8,556.60.
Across the Tasman, New Zealand’s benchmark S&P/NZX-50 index dipped 1.55 percent to 12,641.32 despite data showing inflation in the country declined sharply in the third quarter – opening a path to more supersized interest-rate cuts in coming months.
U.S. stocks closed lower overnight as United Health lowered its full-year earnings outlook and data showed business activity at manufacturing firms in New York State contracted unexpectedly in October.
A disappointing outlook from ASML Holding and concerns about tighter U.S. restrictions on chip sales spurred a selloff in the tech sector while energy stocks tracked oil prices lower.
The tech-heavy Nasdaq Composite lost 1 percent, while the Dow and the S&P 500 both shed around 0.8 percent.
Market Analysis
Asian Shares Decline Amid Tech Selloff
2024-10-16 08:43:31
