Japan's Nikkei Plummets on Wall Street Fears
Asia's major stock indexes experienced significant declines, primarily influenced by disappointing US manufacturing data and a tech-led sell-off on Wall Street. Japan's Nikkei share average fell more than 4%, closing at 37,047.61, while the broader Topix index dropped 3.65% to 2,633.49. The sell-off was heavily impacted by declines in technology stocks, with major shares such as SoftBank Group and Tokyo Electron contributing to the losses. A weaker yen also weighed on local equities.
In the US, the Dow Jones Industrial Average fell 1.5%, the S&P 500 dropped 2.12%, and the Nasdaq Composite declined 3.26%, marking their sharpest declines since early August. The fall was driven by a significant drop in Nvidia shares, which fell 9.5%, wiping out $278.9 billion in market value. Additionally, the latest ISM data indicated the US manufacturing sector was in its fifth month of contraction, heightening fears of a recession. These concerns extended to Asia, where technology stocks led losses in multiple markets, including China and Hong Kong.
Concerns over China's slowing services sector and heightened trade tensions with Canada also contributed to a decline in oil prices. Furthermore, long-term Japanese government bond yields rose to their highest in about a month, with equivalent US Treasury yields also gaining. Despite the overall market downturn, some sectors in Tokyo saw gains, with banks and insurers among the top performers. However, the overall sentiment remained negative, influenced by global economic concerns and the performance of major tech stocks.
