Tokyo, Japan — Stocks in Asia took a hit on Friday, mirroring the downturn in Wall Street as concerns over high inflation and interest rates weighed down on investments in riskier assets.
Chinese markets, in particular, suffered further losses after experiencing significant drops on Thursday, with ongoing trade tensions between the U.S. and China, as well as military exercises near Taiwan, adding to investor anxiety.
Investors also paid close attention to U.S. stock index futures during Asian trading hours, following a sharp decline in Wall Street indexes the day before in response to warnings from Federal Reserve officials about inflation and interest rates. Despite a rally in NVIDIA Corporation’s stock on the back of impressive first-quarter earnings, the positive momentum was not carried over to Asia, where regional chipmakers faced their own challenges.
In China, both the Shanghai and Shenzhen indexes saw declines on Friday, extending the sharp losses from the previous session. The negative sentiment towards the Chinese markets this week was exacerbated by escalating trade tensions with the U.S. and military drills near Taiwan, underscoring the growing tensions in the region.
Meanwhile, Hong Kong’s Hang Seng Index experienced significant losses, driven by a continued downturn in technology stocks. Alibaba Group, in particular, faced a 1% drop after announcing a $5 billion issuance of convertible bonds to drive growth. This decline had a domino effect on other tech giants like Baidu Inc and Tencent Holdings Ltd, while investors shifted focus to profit-taking in property stocks ahead of potential stimulus measures from Beijing.
Across broader Asian markets, the downward trend continued on Friday, following a series of hawkish signals from the Federal Reserve that led investors to reassess their expectations for interest rate cuts this year. Markets in Australia, Japan, and India all saw losses, with Japan also contending with softening retail data for April that reflected ongoing weakness in consumer spending.
In South Korea, Samsung Electronics Co Ltd faced a 2% decline on Friday after reports surfaced about issues with its high bandwidth memory (HBM) chips not meeting Nvidia’s standards due to heating and power concerns. This setback caused the KOSPI index in South Korea to slide over 1%, dragging down shares of SK Hynix Inc, which supplies HBM chips to Nvidia.
Overall, the volatility and uncertainty in global markets reflected a cautious atmosphere among investors as they navigated through economic challenges and geopolitical tensions impacting various sectors across Asia.