Asian Stocks Tumble as Worry on US Economy Sinks Tech Shares

(Bloomberg) — Asian equities slumped at the start of the new week, weighed down by losses in technology stocks on concerns over US economic growth.

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The MSCI Asia Pacific Index fell as much as 1.8%, to the lowest level in three weeks, with chipmakers Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. among the biggest drags. Japan’s Nikkei 225 Stock Average slid more than 3% before trimming its loss as the yen pared last week’s sharp gain. Taiwan’s key stock gauge fell 2%, while Hong Kong benchmarks were poised for a fifth-straight day of losses.

Weak US non-farm payrolls data on Friday stirred worry that the Federal Reserve is moving too slowly to support the world’s largest economy. While investors try to gauge the size of the Fed’s rate cut next week, the Bank of Japan’s recent move to tighten policy has put upward pressure on the nation’s currency, fanning concerns over carry trades.

There is scope for “some more short-term downside for risk assets as positions are likely to unwind,” said Matthew Haupt, a portfolio manager at Wilson Asset Management International. “Expect most weakness in Japan at this stage with all markets to suffer as well,” he said.

Chinese shares declined as weak producer and consumer price data Monday pointed to continued deflationary pressures. The country’s stocks have seen a string of downgrades recently as weak economic data raise doubts over its 5% GDP growth target for 2024.

Sectors to Watch

• Chinese medical equipment stocks advance after authorities said they’ll allow more overseas investment in the sector to revive the economy’s growth.

• Asian luxury-goods stocks drop as their European counterparts struggle due to a worsening of China’s downturn.

• Shares of Chinese real estate developers fall after China Vanke reported that its sales slump worsened in August.

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Markets at a Glance

• MSCI Asia Pacific Index fell 1.6%

• Japan’s Topix Index fell 1.7%; Japan’s Nikkei Index fell 1.8%

• China’s CSI 300 Index fell 1.1%; Hong Kong’s Hang Seng Index fell 1.9%; Hong Kong’s Hang Seng China Enterprises Index fell 2.2%

• Taiwan’s Taiex Index fell 2%

• South Korea’s Kospi Index fell 0.7%; South Korea’s Kospi 200 Index fell 1.1%

• Australia’s S&P/ASX 200 Index fell 0.6%; New Zealand’s S&P/NZX 50 Gross Index fell 0.4%

• India’s NSE Nifty 50 Index fell 0.1%

• Singapore’s Straits Times Index rose 0.9%; Malaysia’s KLCI Index rose 0.3%; Philippines’s PSEi Index rose 0.7%; Indonesia’s JCI Index fell 0.5%; Thailand’s SET Index fell 0.4%; Vietnam’s VN Index fell 0.5%

• 10-year Treasury yield rose 3.2 basis points

• Bloomberg Dollar Index rose 0.1%

• West Texas Intermediate crude rose 1.3% to $69 a barrel

• Euro was little changed

Here Are the Most Notable Movers

• Samsung Electronics shares slide as much as 3.3% after firms including KB Securities and CLSA downgraded their price targets amid softer demand for new tech products.

• Akeso stock surges as much as 14% in Hong Kong, the most since May 31, after the company presented the latest data of its lung cancer drug developed in partnership with Summit Therapeutics.

• Nio’s Hong Kong-listed shares soar as much as 17% Monday in their first trading session following the Chinese EV maker’s upbeat second-quarter results. The company is expected to achieve positive free cash flow in the fourth quarter this year, says Citigroup, citing a call with management.

• China Renaissance shares fall 72% in Hong Kong as trading resumes following more than a year of suspension.

• Shares of Guzman y Gomez jump as much as 7.8%, bucking the broader market weakness, after S&P Dow Jones Indices said the stock will be added to the index in its quarterly review.

Related Market News

• Taking Stock: Weakness in Chinese equities is eroding the confidence of some of Wall Street’s staunchest supporters, with hopes for a turnaround fading in the world’s No. 2 economy.

• Global Wrap: Asia’s benchmark stock index slid to a three-week low as worse-than-expected economic data from the US to Japan added to concerns over a broader slowdown.

OPTIONS

• ONGC, ICICI Lombard, Reliance Industries: India Options Wrap

• Kakaopay, KB Financial, LG H&H: South Korea Options Wrap

• Hyundai Steel, Amorepacific, Hyundai Mobis: Korea Option Pin Risk

This story was produced with the assistance of Bloomberg Automation.

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