Asia-Pacific markets took a significant hit on Wednesday in response to the sell-off of U.S. tech stocks and concerning economic data, particularly from Japan’s Nikkei 225 which saw a 3.19% drop. Semiconductor-related companies like Renesas Electronics, Tokyo Electron, and Advantest experienced substantial losses, with some dropping over 8%. Additionally, Softbank Group, which owns chip designer Arm, saw a decline of more than 5.9%, impacting its relationship with Nvidia.
South Korea’s Kospi and Kosdaq both suffered losses, including chip giants Samsung Electronics and SK Hynix, suppliers for Nvidia, which saw their stocks drop significantly. Similarly, the Taiwan Weighted Index experienced a 3.49% decrease, with key players like Taiwan Semiconductor Manufacturing Company and Foxconn both falling over 3.5%. Although the market initially plummeted, it managed to recover slightly by the end of trading.
Australia’s S&P/ASX 200 was not immune to the tech stock plunge, dropping almost 1.70%, mainly due to weakened oil prices. Despite meeting expectations for the second quarter GDP growth, the market still faced challenges. In contrast, Hong Kong’s Hang Seng index and mainland Chinese CSI 300 saw more modest losses, with chip stocks also experiencing a decline, despite not being related to Nvidia’s supply chain.
The impact of the tech stock sell-off extended to the U.S., with chipmaker Nvidia leading the decline with a loss of over 9% in regular trading. This downfall influenced other major chip companies like Intel, AMD, and Marvell. The VanEck Semiconductor ETF, which tracks semiconductor stocks, recorded its worst day since March 2020, falling 7.5%. Additionally, the ISM manufacturing index for August revealed a slower rate of expansion than expected, further contributing to market concerns.
The turmoil in the global tech market, particularly in Asia-Pacific and the U.S., reflects the fragile nature of the economy amidst fears of a potential recession. With major players like Nvidia experiencing significant losses, the ripple effect has reached other chip companies and the broader market indices. The need for stability and resilience in the face of market volatility is evident, as investors grapple with uncertain economic conditions and shifting trends in the tech sector.
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