On Thursday, the Asian stock markets exhibited widespread declines, predominantly driven by a significant retreat in technology shares following disappointing earnings guidance from Micron Technology, a key player in the semiconductor industry based in the United States. This downturn in technology stocks set a bearish tone across the region, with concerns amplifying as investors assessed the implications for global tech demand and economic growth.
In Japan, the Nikkei 225 index fell by 1.2%, marking one of the steepest declines among Asian markets. The retreat was largely attributed to the tech sector’s weakness, mirroring the sentiment seen in Wall Street’s tech-heavy indices. Similarly, South Korea’s KOSPI index slipped by 0.5%, with semiconductor-related stocks facing selling pressure.
Hong Kong’s Hang Seng index experienced a pronounced decline of 1.7%, influenced by a combination of tech sector woes and broader economic uncertainties. Investors reacted to Micron Technology’s quarterly earnings report, which although surpassing expectations, delivered a disappointing revenue forecast for the upcoming quarter. This guidance shortfall, especially against Micron’s substantial valuation increase over the past year, triggered an after-hours sell-off in Micron’s stock, sparking concerns about the sustainability of recent tech sector gains.
In China, the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes both retreated, dropping by 0.7% and 0.9% respectively. This decline followed reports indicating a narrowing growth trend in industrial profits for May, intensifying worries about a slowdown in China’s economic momentum. Market participants viewed these developments as potential signals for additional stimulus measures from Beijing, which might be unveiled during the upcoming Third Plenum of the Chinese Communist Party in July.
The broader sentiment across Asian markets was negative, with Australia’s ASX 200 index declining by 1%, extending losses from previous sessions. The sell-off was fueled by concerns over higher-than-expected inflation readings, raising fears of a sooner-than-expected interest rate hike by the Reserve Bank of Australia.
Looking ahead, futures for India’s Nifty 50 index suggested a subdued start, indicating a pause in the index’s recent rally to record highs. Investors awaited further cues from global economic data and geopolitical developments, including the outcome of the Presidential debate in the United States and key economic indicators like the PCE price index.
Overall, the day’s trading in Asian markets highlighted a cautious and apprehensive investor sentiment, driven by uncertainties surrounding global tech demand, economic growth prospects in China, and monetary policy expectations in Australia. The market landscape remained fluid, with investors closely monitoring developments that could influence future trading patterns and investment decisions across the region.