Asian Markets Decline After US Tech Setback
Asian markets largely experienced a downturn on Wednesday morning, echoing the losses suffered by US technology stocks the previous day. As investors eagerly await signals of an interest rate cut in the world’s largest economy, the recent dips have also been influenced by high-stakes diplomatic efforts to resolve the ongoing conflict in Ukraine.
Following a meeting between President Donald Trump and Russian counterpart Vladimir Putin in Alaska, top US and European military leaders convened in Washington on Tuesday to discuss the mechanics of a potential Ukraine peace deal. With Ukrainian President Volodymyr Zelensky expressing readiness for face-to-face talks with Putin, investors are closely monitoring the situation for any signs of progress.
The negotiations have injected volatility into oil markets, which retreated on Tuesday from gains made the previous day. In Asia, Tokyo’s Nikkei index plummeted during Wednesday morning trading, while shares in Hong Kong, South Korea, Taipei, and Bangkok also posted losses. Conversely, Shanghai, Sydney, and Manila recorded gains.
On Wall Street, several major technology firms, including Nvidia, Palantir, and Oracle, lost significant market share the previous day. The sell-offs are occurring amid growing unease over the prolonged rally in tech stocks this year, despite a host of uncertainties facing the global economy. Biting tariffs imposed by Trump on key US trading partners have been particularly challenging.
Official data released on Wednesday morning revealed that Japanese exports experienced their steepest drop in over four years last month. Investors are now eagerly anticipating a speech by US Federal Reserve Chair Jerome Powell at the annual retreat of global central bankers in Jackson Hole, Wyoming. Scheduled for Friday, the speech is expected to provide crucial clues about the likelihood of an interest rate cut at the Fed’s next policy meeting in September.
According to Stephen Innes of SPI Asset Management, Powell’s speech is being framed as a high-wire act. “Too dovish, and he risks stoking long-end inflation fears; too stern, and he risks yanking the oxygen mask off equities already trading in rarified air.”
Key figures at around 0215 GMT included:
– Tokyo – Nikkei 225: DOWN 1.6 per cent at 42835.84
– Hong Kong – Hang Seng Index: DOWN 0.3 per cent at 25045.13
– Shanghai – Composite: UP 0.1 per cent at 3,731.51
– Euro/dollar: DOWN at $1.1625 from $1.1646 on Tuesday
– Pound/dollar: DOWN at $1.3465 from $1.3489
– Dollar/yen: DOWN at 147.60 yen from 147.64 yen
– Euro/pound: UP at 86.34 pence from 86.33 pence
– West Texas Intermediate: UP 0.6 per cent at $62.72 per barrel
– Brent North Sea Crude: UP 0.1 per cent at $65.86 per barrel
– New York – Dow: FLAT at 44,922.27 (close)
– London – FTSE 100: UP 0.3 per cent at 9,189.22 (close)
