Asian financial markets commenced trading on Thursday with notable declines, as investor confidence across the region was dampened by fresh losses in US technology stocks. The overnight downturn on Wall Street exerted downward pressure on sentiment, despite modest gains indicated by US stock futures in early trading.
Major Asian Indices Show Significant Declines
Hong Kong's Hang Seng Index (HSI) experienced a substantial drop, falling by 1.2% or 340 points to reach 26,506. In Japan, the Nikkei index shed 604 points, trading at 53,689 by 9:45 am Indian Standard Time (IST). Mainland Chinese markets also reflected the bearish trend, with Shanghai declining by 1% and Shenzhen dropping by 1.8%. South Korea's Kospi index recorded a sharp fall of 215 points or 4%, settling at 5,156.
US Market Performance Sets the Tone
The regional retreat followed a mixed closing session in US markets on Wednesday. The S&P 500 index fell by 0.5% to 6,882.72, marking its fifth modest decline in the past six trading sessions. In contrast, the Dow Jones Industrial Average rose by 0.5% to 49,501.30, while the Nasdaq composite tumbled significantly by 1.5% to 22,904.58.
Although advancing stocks outnumbered declining ones within the S&P 500 by more than two to one, falling technology shares dragged the index lower for a second consecutive session. Technology stocks have remained under persistent pressure despite reporting strong earnings, following sharp price gains that had propelled the sector to dominate market performance. Software companies, in particular, are facing growing concerns over potential competition from firms leveraging artificial intelligence technology.
Commodities and Currency Movements
In commodity markets, oil prices fell sharply, losing more than $1 per barrel. During early Thursday trading, US benchmark crude oil declined by $1.19 to $63.95 per barrel, while Brent crude dropped by $1.24 to $68.22 per barrel.
Precious metals displayed mixed movements. Gold prices advanced by 0.3% to settle at $4,950.80 per ounce, having briefly moved back above the $5,000 mark during the session. The metal has experienced sharp price swings after roughly doubling in value over the past twelve months, nearing $5,600 last week before dropping below $4,500 on Monday. Silver, which has demonstrated even greater volatility, climbed by 1.3%.
Factors Driving Market Volatility
The recent surge in precious metals had been primarily driven by investors seeking safer assets amid growing concerns over international tariffs, a weakening US dollar, and rising government debt levels worldwide. However, market critics have suggested that prices rose too far and too quickly, indicating that a correction was overdue.
In currency markets, the US dollar strengthened slightly against the Japanese yen, moving to 156.83 yen from 156.80. Meanwhile, the euro slipped against the dollar, trading at $1.1795 compared to $1.1804 previously.
The overall market sentiment reflects ongoing uncertainty in global financial markets, with technology sector performance, commodity price fluctuations, and currency movements continuing to influence trading patterns across Asian and international exchanges.
