Asian stocks tumbled this week, with a regional index falling by the most in almost three years, amid intensifying concern that the global economy is headed for a recession.
Esprit Holdings Ltd, a Hong Kong-listed clothing retailer that gets most of its sales in Europe, tumbled 33 percent this week as the currency union’s risk watchdog warned of growing threats to global financial markets.
Honda Motor Co, Japan’s second-largest carmaker, sank 7.1 percent. BHP Billiton Ltd, the world’s No. 1 mining company by market value, slid 9.6 percent, and CNOOC Ltd (中國海洋石油), China’s largest offshore oil producer, tumbled 15 percent as commodity prices tumbled after the US Federal Reserve warned of “significant” risks to the economy.
“It would be flippant to suggest this is just a blip,” said Tim Schroeders, who helps manage US$1 billion in equities at Pengana Capital Ltd in Melbourne. “The aggressive selling of equity markets seems to reflect a heightened probability that the world is moving toward a recession.”
In Taiwan trading on Friday, the TAIEX fell 259.28 points, or 3.6 percent, to 7,0246.22, the lowest close since Sept. 2, 2009. The gauge has dropped 7 percent this week, the steepest drop in seven weeks.
The MSCI Asia Pacific excluding Japan Index fell 10.3 percent this week to 371.85. Japanese markets were closed on Monday and Friday for public holidays.
The gauge joined other global indexes in entering bear markets for the first time in more than two years.
Hong Kong’s Hang Seng Index tumbled 9.2 percent and the MSCI China Index sank 11 percent, their third-worst weekly declines since August 2001, after a report showed that China’s manufacturing may contract for a third month this month.
New Zealand’s NZX 50 Index, which through Sept. 22 was the only developed market benchmark index to have recorded any gain this year, fell 0.3 percent, erasing its advance for this year and joining a global bear market that has wiped more than US$8 trillion from equities in the past two months.
Japan’s Nikkei 225 Stock Average sank 3.4 percent for its holiday-shortened trading week. South Korea’s KOSPI dropped 7.8 percent. Australia’s S&P/ASX 200 Index lost 5.9 percent, and Singapore’s Straits Times Index retreated 3.2 percent. Indonesia’s Jakarta Composite Index tumbled 11 percent, the worst performance of any benchmark index in Asia.
In other markets on Friday:
Manila slumped 5.13 percent, or 210.14 points, from Thursday to end at 3,885.96.
Friday’s fall — the worst in a single day since October 2008, at the beginning of the financial crisis — sent the index to a seven-month low as foreign investors pulled out.
Wellington closed 0.89 percent, or 25.58 points, lower from Thursday at 3,282.71.
Indian shares fell 1.22 percent, or 199.09 points, from Thursday to 16,162.06 and the rupee slid to a 28-month low against the US dollar.
The currency slipped to 50 rupees against the dollar briefly, a level last seen in May 2009, before recovering to 49.09 after suspected central bank intervention.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
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