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Asia-Pacific markets experienced a sharp decline on Wednesday, with Japan facing its most significant single-day drop since early August. This downturn was largely influenced by a sell-off in US technology stocks and weaker economic data from the US, which heightened recession fears across the region.
The Nikkei 225 in Japan plummeted by 4.24% to 37,047.61, while the Topix index fell 3.65%, closing at 2,633.49. The technology sector in Tokyo was particularly hard hit, with notable declines in companies such as Furukawa Electric, which dropped 9.19%, Dainippon Screen Manufacturing falling 8.92%, and Tokyo Electron decreasing by 8.55%.
South Korea's Kospi index decreased by 3.15% to 2,580.80, as major semiconductor firms faced steep losses. SK Square tumbled 8.88%, SK Hynix saw an 8.02% drop, and Hanmi Semiconductor fell by 7%.
Australian markets also suffered significant declines, with the S&P/ASX 200 falling 1.88% to 7,950.50, driven by substantial losses in the mining sector. De Grey Mining dropped 8.71%, Fortescue Metals declined 8.48%, and Gold Road Resources fell 7.65%.
In Hong Kong, the Hang Seng Index decreased by 1.1% to 17,457.34, with energy and mining stocks experiencing major losses. CNOOC was down 6.35%, while Zijin Mining Group and PetroChina fell 6.15% and 6.06%, respectively.
Mainland China's indices showed smaller declines. The Shanghai Composite fell 0.67% to 2,784.28, and the Shenzhen Component decreased by 0.51% to 8,226.24. However, Triumph Science & Technology and Yijiahe Technology saw more significant drops of 7.85% and 6.59%, respectively.
In contrast, New Zealand’s S&P/NZX 50 index was a rare bright spot, rising 0.15% to 12,553.35. Notable gainers included Restaurant Brands New Zealand, up 3.35%, Argosy Property, which rose 1.7%, and Fisher & Paykel Healthcare, increasing by 1.49%.
In currency markets, the US dollar weakened slightly against the yen, trading at JPY 145.19, but gained against the Australian dollar and New Zealand dollar. Oil prices edged lower, with Brent crude futures falling to $73.56 per barrel and West Texas Intermediate slipping to $70.08.
Economic data revealed that China’s services sector grew at a slower pace in August, with the Caixin services purchasing managers index (PMI) dropping to 51.6 from 52.1 in July. Meanwhile, in the US, semiconductor stocks faced a significant decline, led by Nvidia, which fell 9%. This downturn extended to other chipmakers and the VanEck Semiconductor ETF, which experienced its worst performance since March 2020.
The ISM manufacturing index for August in the US showed a continued contraction, with a reading of 47.2, slightly higher than July's 46.8 but below market expectations. This reading underscores ongoing challenges in the manufacturing sector.
