Asian stock markets posted steep losses Thursday after Wall Street suffered one of its most significant crashes in two years.
Worries about consumer resilience and corporate profitability were exacerbated by disappointing earnings reports from retailers on Wednesday, leading to a volatile market.
Hong Kong’s stock price was down more than 3% on Thursday morning, while Tokyo’s was down about 2.5%.
After its disappointing first-quarter results, Chinese tech giant Tencent’s stock dropped more than eight percent in Hong Kong.
Thailand’s stock market had decreased for three consecutive sessions, losing almost 40 points or 2.4 percent. Thailand’s Stock Exchange now sits just below the 1,585-point plateau, but it is expected to stop the bleeding on Monday.
After losses from the financial sector and mixed results from the energy sector, the SET ended Friday slightly lower.
The SET index fell by 0.14 points or 0.01 percent to 1,584.38 after trading between 1,578.11 and 1,597.58. Shares traded at 22.376 billion worth 75.432 billion baht. There were 920 gainers and 872 losers, with 442 stocks finishing unchanged.
Elsewhere in the region, Australia posted its lowest jobless rate in 48 years. This potentially boosts Prime Minister Scott Morrison two days ahead of tightly contested federal elections.
According to the official statistics body, Australia’s unemployment rate fell to 3.9%, the lowest level since 1974.
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However, stocks in Sydney, Singapore, Shanghai, Seoul, and Taipei all fell, although Jakarta rose by over 2%.
Stephen Innes at SPI Asset Management called Wednesday’s losses “the largest daily decline since June 2020.”
“The weakness occurred as Target’s earnings added fuel to the recession risk narrative,” he said.
Despite higher sales, earnings at Target, a big-box retailer focusing on North America, miss expectations by around 25%.
In results similar to Walmart’s, the company cited higher operating costs as a factor.
In response to the rising prices of food, gasoline, and other household staples, retailers said profits were under pressure, and some consumers avoided discretionary purchases.
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The Dow lost more than 1,150 points or 3.6%, the Nasdaq fell 4.7%, and all three major US indices dropped.
The European stock markets were also down.
Fawad Razaqzada at City Index says, “the big falls in shares of this retail…show the damage inflation is causing to their profit margins.”.
“What’s more, consumers are getting squeezed as well, and if they now start to cut back on spending, retailers could suffer even further,” he added.
Federal Reserve Chair Jerome Powell said Tuesday that the US central bank would raise interest rates until there is “clear and convincing” evidence that inflation is on the decline.