Equities Head Lower On Middle East Tensions, TSMC Revised Outlook

Today, regional Asian equities opened lower, primarily due to losses in tech stocks following TSMC's revised outlook for chip market expansion. Treasury yields to rose after US weekly jobless claims were released, indicating resilience in the labor market. Additionally, hawkish remarks from Federal Reserve officials dampened investor sentiment, Fed's Williams emphasized the data-dependent nature of future rate decisions, while Bostic reiterated expectations of only one rate cut this year. The market further reacted to reports of explosions near the City of Isfahan in Central Iran, leading to airspace closures and activated air defenses, resulting in a heavy sell-off of risk assets. Although major indices recovered some losses, they remain in negative territory, with declines ranging from 2% to 6%.

• Japanese stocks have gapped lower today, initially driven lower after TSMC earnings caused weakness in the tech sectors and hawkish comments from Fed speaker, while Japan then released inflation data that came in at 2.7% vs 2.8% y/y. The yen has ticked higher as investors move into haven assets on the back of growing tension in the middle east. The Nikkei is down 2.45%, the Topix is off 1.85%, while the Topix banks Index is faring better than the wider market down just 0.83%, which could be on the back of Berkshire Hathaway's record bond issuance.
• South Korean equities are lower today, the Kospi have now erased all the yearly gains, and trade off 1.00% for the year, today it tested the 200-day EMA of 2,571, we have recovered and trade back above it however still down 1.65% for the day.
• Taiwan equities were down as much as 4.95% earlier, the initial moves of on the back of weaker TSMC after they revised outlook down and the fact the stocks has accounted for 60% of the index's gains for the year, higher yields also impacted the market and then middle east tensions breaking out pushed the market to lows. The Taiex has recovered some of the early losses and now trade down 3%.
• Australian equities are lower, although one of the better performing markets today. There has been very little in the way of local market headlines for the country. Energy has been the only sector in the green today, with the ASX200 following global markets lower, currently down 1.20%
• Elsewhere in SEA, New Zealand Equities are down 0.70%, Indonesian equities are down 1.45%, Singapore down 0.60%, Philippines down 1.70% while Malaysian equities have managed to trade up 0.43%