Most Asian stocks fell on Thursday as the recovery in Japanese markets stalled amid lingering concerns about slowing economic growth and higher interest rates, while technology stocks saw an extended decline.
Regional markets got a negative boost from a weak session overnight on Wall Street, as the recovery from multi-month lows faltered. U.S. stock index futures also fell in Asian trading.
Stocks were also weighed down by concerns about a slowing economy in China after disappointing trade data from the country on Wednesday.
Nikkei, Topix back in red as recovery falter
Japanese stocks were in a range of flat to lower levels on Thursday after a two-day rally dried up. Both indexes had fallen sharply in early morning trade but have since recouped most of their losses.
Japanese stocks rebounded from losses of more than 10% in the past two days after some Bank of Japan officials tried to downplay the bank’s hawkish outlook on interest rates.
But a report by Bank of Japan policymakers released on Thursday showed that central bank members still see room for further rate hikes, and that interest rates need to reach around 1% to reach a neutral level for the economy.
The unexpectedly hawkish tone from the Bank of Japan was the main driver of the recent slide in Japanese markets, sending the Nikkei and Topix indexes into bear market territory on Monday.
Some disappointing earnings also weighed on the market, with tech investment giant SoftBank Group Corp. (TYO:) falling about 4% after reporting an unexpected loss in the third quarter.
Asian tech undercuts US peers
Major Asian technology stocks also fell, tracking weak signals from their U.S. counterparts, particularly in the chipmaking sector. U.S. chip stocks have seen two days of sharp losses following disappointing earnings from Super Micro Computer (NASDAQ: ).
South Korea’s index fell 0.9%, while Hong Kong’s index fell.
Shares of Taiwan’s TSMC (TW:) – the world’s largest contract chipmaker – fell 2%.
China stocks fall, trade data disappoints
Chinese and global stock indexes fell 0.2% each on Thursday, extending recent declines and remaining at their lowest levels in more than five months.
Trade data released on Wednesday continued to paint a bleak picture for the economy, with China’s trade surplus shrinking more than expected in July. Exports unexpectedly contracted after the European Union imposed steep tariffs on Chinese electric cars, while China’s oil imports fell sharply.
Asian markets were generally mostly negative, with the Australian Stock Exchange index down 0.3%.
India index futures pointed to a positive open after the index rose sharply from recent losses on Wednesday.
Attention now focuses on the central bank meeting, where the central bank is widely expected to keep interest rates unchanged.