Asian Shares Plummet Amid Concerns Over Big Tech Earnings
In today’s trading, Asian stocks dropped significantly mirroring a severe decline on Wall Street following disappointing earnings reports from major technology firms. Negative sentiment towards China also persisted, with the country’s stock indexes nearing their lowest levels since February.
Tech-focused Asian markets were the hardest hit on Thursday. Japan’s Nikkei 225 fell 2.7%, and South Korea’s Kospi dropped 1.8%, impacted further by weaker-than-expected second-quarter GDP data. Memory chip maker SK Hynix Inc. plummeted nearly 9% despite posting better-than-expected quarterly earnings driven by strong artificial intelligence demand. Hong Kong’s Hang Seng Index also fell 1.8%, as Chinese internet giants followed the losses of their US counterparts.
Broader Asian markets also declined as risk appetite was dampened by the tech slump. Australia’s S&P/ASX 200 index dropped 1.2%, and Japan’s broader TOPIX index fell 2.2%. Both indexes had reached record highs earlier in July.
Futures for India’s Nifty 50 index fell 0.3%, indicating a negative open as the index faced significant profit-taking in recent sessions. The Nifty and India’s BSE Sensex 30 had both achieved a series of record highs in July but were now poised for a significant pullback from those levels.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes declined less sharply than their Asian counterparts, due to a lower concentration of tech stocks. Both indexes were down around 0.7%, hitting their weakest levels since late February.
Chinese markets were reeling from substantial losses as a series of weak economic indicators dampened sentiment toward the country. The Chinese economy grew less than anticipated in the second quarter.
Surprise interest rate cuts little to bolster confidence. Reports on Thursday revealed that several state-owned Chinese banks had reduced borrowing costs following an unexpected cut in the loan prime rate earlier in the week.
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