BANGKOK – Asian markets continued their downward trajectory on Thursday, influenced by a significant drop in U.S. stocks, particularly in the AI sector, marking Wall Street’s sharpest decline in almost a month.
Investors are keenly awaiting updates on U.S. inflation figures later today and are also focused on Japan’s upcoming central bank decision on interest rates set for Friday. Despite an economic contraction in the third quarter, the Bank of Japan is anticipated to raise its benchmark rate by 0.25%, aiming to curb inflationary pressures.
In Tokyo, the Nikkei 225 retreated by 1% to close at 49,001.50, with technology stocks at the forefront of the decline.
Shares of tech and telecom titan SoftBank plummeted by 4%, while Tokyo Electron, a prominent chip manufacturer, saw a 3.2% decrease. Similarly, Advantest, specializing in chip testing equipment, fell by 3.3%.
Honda Motor Corp. experienced a 2.2% drop following news of production halts at certain Japanese and Chinese factories due to a chip shortage.
South Korea’s Kospi index slid 1.5% to 3,994.51, driven down by losses in electronics and automotive stocks. LG Electronics dipped 3.1%, and Samsung Electronics saw a slight decline of 0.3%.
Chinese markets were mixed as Hong Kong’s Hang Seng fell 0.3% to 25,385.93, while the Shanghai Composite index edged 0.3% higher, to 3,880.49.
In Australia, the S&P/ASX 200 was nearly unchanged at 8,588.20.
Later Thursday, the U.S. government will report on inflation last month. Economists expect that report to show prices for U.S. consumers continue to rise faster than anyone would like.
On Wednesday, the S&P 500 fell 1.2% to 6,721.43 and the Dow Jones Industrial Average dipped 0.5% to 47,885.97. The Nasdaq composite dropped 1.8% to 22,693.32.
Slightly more stocks rose within the S&P 500 than fell, but they got drowned out by the drops for companies in the artificial-intelligence industry.
The sector is being pressured by questions over whether Big Tech companies’ share prices have shot too high, whether all the investment in AI will be profitable and productive enough to justify the costs, and by worries over stratospheric levels of debt some companies are taking on to pay for it all.
Broadcom dropped 4.5%, Oracle fell 5.4% and CoreWeave sank 7.1%. Nvidia, the chip company that’s become Wall Street’s most influential stock because of its tremendous size, fell 3.8% and was the day’s heaviest weight on the S&P 500.
Power companies that jumped earlier in the year on expectations for stronger demand from electricity-sucking data centers also lost some of their shine. Constellation Energy fell 6.7%.
On the winning side of Wall Street were oil companies, after President Donald Trump ordered a blockade of all “sanctioned oil tankers” into Venezuela.
That sent the price of a barrel of benchmark U.S. crude higher by 1.2% to $55.94. just a day after it sank to its lowest level since 2021.
Early Thursday, U.S. crude was up 51 cents at $56.32 per barrel. Brent crude, the international standard, gained 49 cents to $60.17 per barrel.
It had climbed 1.3% on Wednesday.
That in turn helped ConocoPhillips rise 4.6%. Devon Energy rallied 5.3%, and Exxon Mobil climbed 2.4%.
Oil prices have been falling for most of this year on expectations that companies are pumping more than enough crude to meet the world’s demand.
Netflix added 0.2% after Warner Bros. Discovery’s board said it still recommends shareholders approve a buyout offer from the streaming giant for its Warner Bros. business, rather than a competing hostile bid from Paramount Skydance for the entire company.
Warner Bros. Discovery fell 2.4%, while Paramount Skydance dropped 5.4%.
In other dealings early Thursday, the U.S. dollar rose to 155.90 Japanese yen from 155.70 yen. The euro climbed to $1.1746 from $1.1743.
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