Asian Markets Trade Lower, Taiwan Struck by Strongest Quake in 25 Years

Arjun Pandit
03 Apr, 2024
Mumbai

Market indexes in Japan, South Korea, and China dropped as much as 1% on the growing skepticism that the U.S. Federal Reserve would lower its rate in June after a string of economic data suggested stronger-than-expected economic activities. 

Construction spending and manufactured goods orders rose sharply from a year ago in February, and job openings edged higher in March to 8.6 million, indicating moderate but healthy labor market conditions. 

 

Taiwan Struck with 7.3 Magnitude Earthquake

Japan issued a tsunami alert after a 7.3-magnitude earthquake struck Taiwan and tremors felt as far away as Hong Kong. 

Semiconductor plants evacuated plants in Taiwan after the earthquake struck the east coast of Taiwan at 7:58 local time on Wednesday, according to local authorities. 

Taiwan Power Company confirmed that most of the power supply was restored within two hours of the earthquake. 

The quake was the strongest to hit the island since 1999, when a 7.6-magnitude earthquake rocked the island and killed 2,400 people and damaged 50,000 structures in Taiwan's worst-recorded earthquakes. 

 

Tokyo Indexes Turn Lower In Volatile Trading 

Market indexes in Tokyo edged lower and dropped to a two-week low after investors dialed back U.S. rate-cut expectations. 

Market sentiment was dented after the latest U.S. jobs report showed strong labor demand and resilient economic conditions. 

Moreover, investors were on guard after Japan issued a tsunami alert for Okinawa Prefecture after Taiwan was struck by a 7.3-magnitude earthquake, killing at least 4 and injuring 97. 

Japan's service index was revised lower to a seven-month high of 54.1 in March from the preliminary estimate of 54.9. 

Despite the downward revision, service sector activities have been expanding for 19 consecutive months due to improving demand and an expanding customer base. 

The Nikkei 225 index decreased 0.6% to 39,621.99, and the Topix index eased 0.01% to 2,715.70. 

Rate-sensitive stocks and technology stocks were among the leading gainers amid weak market conditions in Tokyo trading. 

Mitsubishi UFJ, Mizuho Group, and Sumitomo Mitsui gained between 0.3% and 2.2%. 

Tokyo Electron, Screen Holdings, and Advantest gained between 0.4% and 1.6%, but SoftBank eased 1.3%. 

Kansai Electric Power, Tokyo Gas, and Chubu Electric Power advanced between 2% and 4%. 

 

Shanghai and Hong Kong Indexes Ease

Stocks in Shanghai and Hong Kong fell after strong U.S. economic data pushed U.S. bond yields to a three-month high, sparking global risk-off sentiment. 

The market sentiment was overwhelmed by the global sell-off, and investors overlooked the improving service activities in China. 

China's service activities rose at the fastest pace in three months, according to a private survey released by S&P Global. 

The increase in service activities was driven by the rise in new orders and exports, which rose at the fastest pace in nine months amid improvements in demand conditions and new business development activities. 

The Caixin China General Service PMI Index improved to 52.7 in March from a three-month low of 52.5 in February, and the index showed rising activities for the 15th month in a row. 

Markets in Shanghai and Hong Kong have been on the defensive after the government intervention in February failed to spark a sustained recovery in financial markets. 

The CSI 300 index declined 0.3% to 3,570.78, and the Hang Seng index dropped 0.7% to 16,806.29. 

Alibaba Group declined 0.3% to HK$70.80 and erased an early gain of as much as 1.2% after the company confirmed the repurchase of $4.8 billion of its own stock in the first quarter. 

Interest-rate-sensitive stocks and banks were among the leading decliners. 

Bank of China declined 1.3% to HK$3.25, HSBC Holdings plc dropped 1.1% to $61.25, and China Construction Bank eased 0.2% to HK$4.84. 

Xiaomi Corp. decreased 3.1% to HK$15.78 and erased about 9% of the gain in the previous session after the smartphone maker launched its first electric vehicle. 

 

India Indexes Under Pressure Amid Rising Commodity Prices and Rate Uncertainties

Stocks in Mumbai struggled to advance in Wednesday's trading amid weakness in Asian markets. 

The Sensex and the Nifty indexes edged down, and gold traded at a new record high amid rising tensions in the Middle East. 

Moreover, crude oil prices in international markets traded at a 5-month high after Brent crude oil crossed $85 a barrel. 

Investors remained cautious ahead of the start of the earnings season, and tech service companies are expected to report muted earnings growth. 

Higher commodity prices in international markets also weighed on market sentiment, as rising tensions in the Middle East and Red Sea and the protracted war in Ukraine added to supply chain disruption worries and global interest rate uncertainty. 

The Sensex index decreased 0.2% to 73,757.23, and the Nifty index edged down 0.3% to 22,385.70. 

The yield on the 10-year Indian government bonds held steady at 7.10%, and the Indian rupee held steady at ₹83.35 against the U.S. dollar.