Asian Stock Plunge as Nikkei Leads with 3% Drop

Asian stock markets plunged, led by a 3% drop in Japan’s Nikkei; the global sell-off impacted commodities and U.S. tech stocks.

Asian stock markets experienced a significant downturn today, driven by a broader global sell-off and led by Japan’s Nikkei 225, which plummeted 3.14%. The Nikkei’s decline extended its losing streak to seven consecutive days, exacerbated by Wall Street’s recent tumble.

Market Overview

• Japan: The Nikkei 225 fell 3.14%, with the broader Topix index dropping 2.24%. Major stocks hit, as SoftBank Group plummeted 9% and Renesas Electronics dropped 14%. The yen gained strength for the fourth day, hitting an 11-week high against the U.S. dollar at 152.28. Speculation is growing that the Bank of Japan may discuss a rate hike and a plan to reduce bond-buying in its upcoming meeting.
• South Korea: The Kospi declined 1.8%, and the Kosdaq fell 2.32%, largely influenced by a 6% drop in SK Hynix shares. Despite reporting record quarterly revenue of 16.42 trillion won ($11.85 billion) and a return to profitability, SK Hynix’s stock fell sharply. South Korea’s advanced second-quarter GDP grew 2.3% year-on-year but contracted 0.2% quarter-on-quarter, falling short of expectations.
• Hong Kong and China: The Hang Seng index dropped 1.71%, while the CSI 300 fell 0.98%. China’s central bank cut the medium-term lending rate to 2.3% from 2.5% to stimulate the economy, following a recent reduction in the loan prime rate.
• Australia: The S&P/ASX 200 fell 1.29%, reflecting the global trend of market declines.
• Taiwan: Taiwan’s market remained closed for the second day as the island prepared for Typhoon Gaemi.

Asian Stock Plunge as Nikkei Leads with 3% Drop

Commodities and Rates

• Commodities: Gold fell 1.47% to $2,374.35, while silver dropped significantly by 3.64% to $28.11. Brent crude oil was down 0.73% at $81.13, and WTI crude oil fell 0.81% to $76.79.
• Rates: The US 10-year yield stood at 4.257%, the UK 10-year yield at 4.158%, and the German 10-year yield at 2.445%.

Economic Data

• Canada: The overnight rate remained steady at 4.5%, matching expectations.
• United States: Key economic indicators showed weaker-than-expected results. The Flash Manufacturing PMI was 49.5, below the expected 51.7, while the Flash Services PMI exceeded expectations at 56.0 versus 54.7. New Home Sales came in at 617K, missing the anticipated 639K.

U.S. Market Impact

In the U.S., the S&P 500 and Nasdaq Composite experienced their worst days since 2022. The S&P 500 fell 2.31% to 5,427.13, and the Nasdaq dropped 3.64% to 17,342.41. The Dow Jones Industrial Average decreased by 1.25%, closing at 39,853.87. Notable tech stocks faced significant declines: Nvidia lost 6.8%, Meta Platforms dropped 5.6%, Alphabet fell 5%, and Tesla saw a substantial 12.3% decline following disappointing results and a 7% year-over-year drop in auto revenue.

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As global markets adjust, investors closely monitor economic indicators and central bank policies for further guidance.

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