Asia’s major stock indexes were feeling the heat again on Thursday as worries over higher interest rates for much longer than was hoped left an air of gloom over trading floors.
Stocks slid to 11-month lows, US futures dropped and the dollar surged as Treasury yields spiked back toward recent peaks, putting the pressure on equities.
Japan’s Nikkei share average slumped and endured its worst day in three weeks, as chip-related shares led a broad selloff after US tech stocks tumbled overnight.
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The Nikkei share average slipped 2.14%, or 668.14 points, to close at 30,601.78, its biggest fall since October 4 and snapping a two-day winning streak. Of the equity benchmark’s 225 components, 211 fell while just 13 rose, with one flat. The broader Topix was down 1.34%, or 30.15 points, to 2,224.25.
The decline followed sharp losses on Wall Street, with the S&P 500 losing 1.4% and the tech-heavy Nasdaq slumping 2.4%. The Philadelphia SE Semiconductor Index plunged 4.1%.
Chip-testing equipment maker Advantest led the Nikkei decliners, dropping 6.52%. Chip-making machinery giant Tokyo Electron was next with a 4.59% retreat, followed by a 4.47% slide in smaller peer Screen Holdings.
Mainland Chinese stocks edged ahead, despite its blue-chip index hovering around a four-and-a-half year low in earlier trade amid weak sentiment, thanks to Beijing’s 1 trillion yuan bond issue on Wednesday.
The blue-chip CSI 300 Index gained 0.28% and the Shanghai Composite Index rose 0.48%, or 14.19 points, to 2,988.30. The Shenzhen Composite Index on China’s second exchange edged up 0.45%, or 8.21 points, to 1,825.39.
In Hong Kong, tech giants slipped 0.3%, while mainland developers plunged 2.2%. The benchmark Hang Seng Index dropped lost 0.24%, or 40.72 points, to 17,044.61, but the Hang Seng China Enterprises Index gained 0.10%.
Elsewhere across the region, in earlier trade, Seoul was down more than 2%, while Sydney, Mumbai, Bangkok, Singapore, Taipei, Wellington, Jakarta and Manila were also in the red. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.5%.
Alphabet Shares Slip
Globally, a rebound in US home sales was the latest trigger for concern in the bond market and corporate earnings have also been mixed.
Alphabet shares logged their worst session since March 2020 overnight, dropping 9.5% as investors were disappointed with stalling growth in its cloud division.
Shares in Facebook parent Meta fell 4% on Wednesday and another 3% in after-hours trade after publishing results showing better-than-expected revenue but a cloudy outlook, with expenses seen topping Wall Street estimates.
The benchmark 10-year Treasury yield, a bedrock for pricing risk-taking across financial markets, jumped 11 basis points (bps) overnight and traded at 4.96% on Thursday.
In early European trades, the pan-region Euro Stoxx 50 futures were down 1.03%, German DAX futures were down 0.93%, while FTSE futures were down 0.6%.
In the currency markets, the dollar index hit a two-week high of 106.77. The yen weakened past 150 per dollar, a level that has put traders on guard for intervention to support the Japanese currency. By 0500 GMT the yen was trading at 150.45 per dollar, its weakest in a year.
Oil prices slipped as US crude dipped 0.15% to $85.26 a barrel. Brent crude fell to $89.89 per barrel.
Oil prices rose about 2% on Wednesday on worries about the conflict in the Middle East, but gains were capped by higher US crude inventories and gloomy economic prospects in Europe.
Gold was slightly higher. Spot gold was traded at $1,988.3837 per ounce.
Key figures
Tokyo – Nikkei 225 < DOWN 2.14% at 30,601.78 (close)
Hong Kong – Hang Seng Index < DOWN 0.24% at 17,044.61 (close)
Shanghai – Composite > UP 0.48% at 2,988.30 (close)
London – FTSE 100 < DOWN 0.74% at 7,359.35 (0933 BST)
New York – Dow < DOWN 0.32% at 33,035.93 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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