Bears claw down Asian markets after Wall Street tanks due to Nvidia plunge

Asian markets, including the Indian stock market, tumbled Wednesday (September 4), weighed down primarily by heavy losses in tech and chip firms.

The drop came as a sharp sell-off in major US tech stocks and disappointing US factory data stoked recession concerns in that country, and affected investor sentiments the world over.

Bears claw down Asian markets

Tokyo and Taipei markets fell more than 4 per cent, while Seoul lost 3.2 per cent. Hong Kong, Sydney, and Singapore were down over 1 per cent, with Shanghai and Bangkok also recording significant losses.

In India, the benchmark indices, BSE Sensex and NSE Nifty 50, followed the trend and opened in red.

While the 30-share Sensex was down 450 points or 0.59 per cent, the broader Nifty 50 index tumbled over 174 points, sinking 0.69 per cent. Even as the market closing time neared, the selling pressure remained strong on both indices.

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Behind the pessimism in the Asian markets were the fears of recession in the US, sparked by concerning factory output data for August.

Figures showed a marginal improvement in factory activity in August, but it still remained in contraction for a fifth successive month. In recent times, weak jobs and economic growth data has been considered positive since it would boost the chance of the Federal Reserve cutting interest rates. However, that trend appears to have shifted. Analysts warned that the bad news was now being taken as a worrying sign for the economy.

Investors concerned about ROI from chipmakers

In Japan, chip testing equipment giant Advantest plunged 7.7 per cent, Tokyo Electron fell more than 8 per cent, and Sony dropped 3 per cent. Taiwan Semiconductor Manufacturing Company (TSMC) shed more than 5 per cent in Taipei, while in South Korea, SK Hynix plunged 8 per cent, and Samsung lost over 3 per cent.

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The regional declines followed a rout on Wall Street, where tech behemoths like Nvidia, Apple, and Amazon faced a steep sell-off, with Nvidia tanking 9.5 per cent — wiping nearly $280 billion off its market value.

The losses were driven by concerns that the AI chip surge had gone too far, with a UBS Global Asset Management analyst noting that investors were becoming nervous amid weaker macroeconomic data.

Adding to the pain, it emerged after US markets closed that US authorities had issued Nvidia and other firms subpoenas as it probes claims they violated antitrust laws.

With inputs from AFP