Asian stock markets faced renewed pressure on Wednesday, with major technology shares leading declines after Wall Street’s overnight sell-off. Japan’s Nikkei index dropped sharply following disappointing trade data, while South Korea’s KOSPI also slumped to multi-week lows.
Tech Sector Leads Losses Across Asia
Technology stocks were at the center of Wednesday’s downturn, mirroring heavy losses in U.S. markets. Japan’s Nikkei 225 fell by 1.5%, and the broader TOPIX index slipped 0.6%. Meanwhile, South Korea’s KOSPI slid nearly 1.8%, hitting a one-and-a-half-month low.
The slump followed Wall Street’s pullback, where chipmakers and AI-related firms faced profit-taking. Nvidia (NVDA) dropped 3.5%, while Intel (INTC) plunged nearly 7%. Reports also suggested that Washington may seek equity stakes in chipmakers receiving subsidies under the CHIPS Act, raising concerns for firms like Samsung Electronics (005930.KQ) and TSMC (2330.TW).
Japanese Markets Hit by Weak Trade Data
Adding to the pressure, Japan’s July trade report showed a surprise deficit, with exports falling more than expected due to weaker Chinese demand and lingering U.S. tariffs. Although Washington recently reduced duties on Japanese imports to 15%, uncertainty remains over whether this will be enough to revive export momentum.
The disappointing trade outlook dragged the Nikkei further from its recent record highs, highlighting vulnerabilities in Japan’s export-driven economy.
China Outperforms as Investors Shift Away from Tech
In contrast, Chinese equities were more resilient. The Shanghai Composite and CSI 300 indices rose about 0.4% each as investors shifted toward non-tech sectors. The Hang Seng index in Hong Kong, however, slipped 0.3% due to its heavier tech exposure.
The People’s Bank of China (PBOC) kept its loan prime rates unchanged, as expected, signaling that Beijing may rely more on fiscal stimulus than aggressive monetary easing. Optimism over improving U.S.-China trade relations also lent support to Chinese shares.
Broader Market Reaction in Asia-Pacific
- Australia’s ASX 200 gained 0.5%, supported by strength in non-tech sectors, and is now trading near record highs.
- India’s Nifty 50 futures slipped 0.2% after a strong rally earlier this week, with concerns over U.S. tariffs on Indian exports weighing on sentiment.
- Singapore’s Straits Times index rose 0.3%, reflecting a more stable outlook compared to North Asian peers.
Outlook for Asian Equities
Investors are now turning their attention to the upcoming Jackson Hole Symposium, where Federal Reserve Chair Jerome Powell will provide fresh guidance on U.S. monetary policy. With doubts creeping in about the Fed’s rate-cut timeline, tech-heavy markets may continue to see volatility in the near term.
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