The Asia-Pacific markets experienced a significant decline on Wednesday, with Japan’s Nikkei 225 leading the plunge. The index was down 3.19%, causing losses across the region. Semiconductor related stocks such as Renesas Electronics, Tokyo Electron, and Advantest saw substantial drops, with Renesas Electronics plunging 8% and becoming the largest loser on the index.
South Korea’s Kospi and the small-cap Kosdaq also suffered losses, with both indices down over 2%. Chip giants Samsung Electronics and SK Hynix, both Nvidia suppliers, experienced losses of 2.62% and 6.36% respectively. Similarly, the Taiwan Weighted Index dropped 3.49%, with heavyweights Taiwan Semiconductor Manufacturing Company and Hon Hai Precision Industry, known as Foxconn, falling over 3.5%.
Australia’s S&P/ASX 200 lost almost 1.70%, mainly due to weakness in oil prices. The country’s second-quarter GDP growth met expectations, with a 1% year-on-year increase, but the quarter-on-quarter growth of 0.2% was slightly lower than anticipated. On the other hand, Hong Kong’s Hang Seng index saw a smaller loss of 1.5%, whereas mainland Chinese CSI 300 experienced a decline of 0.47%.
Despite being unrelated to Nvidia’s supply chain, Chinese chip stocks also faced weaknesses. State-linked Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor both saw declines, with the former dropping 1.95% and the latter falling 1.06%. Additionally, the Caixin services purchasing managers index for August revealed a slower rate of expansion in China’s service sector compared to July, with the PMI falling to 51.6 from 52.1.
In the United States, chipmaker Nvidia lost over 9% in regular trading, impacting other counterparts like Intel, AMD, and Marvell. The VanEck Semiconductor ETF, which tracks semiconductor stocks, experienced a 7.5% decline, marking its worst day since March 2020. Furthermore, the ISM manufacturing index for August came in at 47.2%, slightly below expectations, indicating a contraction in the percentage of companies reporting expansion.
The global sell-off on August 5 had a lasting impact, with all three major indexes in the US recording their worst days. The Dow Jones Industrial Average fell 1.51%, the S&P 500 was down 2.12%, and the Nasdaq Composite saw the largest loss at 3.26%. These declines reflected the broader concerns in the tech sector and the potential implications on the global economy.
The sell-off in U.S. tech stocks and the weak economic data have reverberated across the Asia-Pacific markets, leading to significant losses in major indices. The interconnectedness of the global economy is evident in how movements in one market can cascade through others, amplifying the overall impact. As investors monitor further developments, the volatility in the tech sector and its repercussions on the broader market will continue to be a key area of focus.
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