Asian stock markets faced widespread declines on Thursday, driven by concerns over escalating trade tensions between the United States and China, which overshadowed optimism from Wall Street’s recent gains.
Tokyo’s Nikkei 225 index dropped sharply by 1.9% to 40,324.17 by early afternoon, with technology shares bearing the brunt of the selling pressure. Reports indicating potential stringent trade restrictions by President Joe Biden on semiconductor technology exports to China weighed heavily on investor sentiment. Shares of Tokyo Electron plummeted 9.4%, while Advantest, another chip equipment maker, saw its shares sink 4.6%. The broader market was also impacted by a stronger yen, which raised concerns about the profitability of Japanese exporters like Toyota Motor Corp.
Elsewhere in Asia, Hong Kong managed to buck the trend with a modest gain of 0.3% to 17,776.73, while the Shanghai Composite index slipped marginally by 0.1% to 2,959.25. In Australia, the S&P/ASX 200 declined 0.2% to 8,041.80, and South Korea’s Kospi fell 1.4% to 2,803.95. Taiwan’s Taiex experienced a notable decline of 2.1%, dragged down by TSMC’s 3.2% drop in response to overnight losses in U.S. trading.
The market movements underscored ongoing apprehensions over potential U.S. policy actions affecting China’s access to advanced technology, amidst a backdrop of broader geopolitical tensions. In the currency markets, the U.S. dollar edged higher against the Japanese yen, trading at 156.49 yen, reflecting fluctuating investor sentiment influenced by recent U.S. political discourse.
On Wall Street, the previous day saw significant losses, particularly for tech giants like Nvidia, pushing the Nasdaq composite down 2.8% to 17,996.92, its sharpest decline since 2022. The S&P 500 also retreated by 1.4% to 5,588.27, while the Dow Jones Industrial Average managed a modest gain of 0.6% to 41,198.08.
Amidst these developments, energy markets showed slight gains in early trading on Thursday, with benchmark U.S. crude rising 61 cents to $83.46 a barrel, and Brent crude gaining 42 cents to $85.50 a barrel.
Investors across global markets remained cautious, awaiting further clarity on U.S.-China relations and their potential implications for international trade and economic stability.
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