Equities Head Lower On Weaker Tech Stocks, Central Bank Moves

Asian stocks fell to a four-week low with technology stocks declining as investors look to pull back on their AI investments. The MSCI Asia Pacific Index dropped over 1.5%, with significant declines in Hitachi, SK Hynix, and Tencent. Japan’s Nikkei 225 fell nearly 3%, while the yen continued to strengthen against the USD. The losses followed a Wall Street selloff triggered by disappointing earnings from Tesla which fell over 10% and Alphabet, cooling an already weakening AI-driven rally. Former NY Fed Pres Dudley said he had changed his mind and rate cuts were warranted now, not later in the year, with some analysts believing such a move would be worrisome as it would indicate officials rushing to avoid a recession. Concerns about Beijing's economic rejuvenation also weighed on Hong Kong and mainland China stocks, while Taiwan's market remained closed due to a typhoon.

• Japanese equities are under pressure today with benchmark indices down 1-3% with some nearing a technical correction, as an AI-driven rally in technology shares reversed and concerns grew over a potential BoJ interest rate hike. The Nikkei is down 2.75% today and has dropped over 10% from its peak two weeks ago, with Renesas Electronics leading the decline after disappointing earnings. The broader Topix index is 2.5% lower, with significant declines in exporters such as Hitachi and Tokyo Electron as the yen continues to trade higher and now is now up 5% over the past two weeks.
• South Korean equities are lower, with tech stocks like SK Hynix tumbled as much as 8.4%, even after solid earnings, contributing to the broader market's decline. The strengthening yen has added to the pressure on South Korean exporters. The Kospi & Kosdaq both trade about 1.50% lower.
• Taiwan equity markets are again closed today due to a Typhoon, Taiex futures continue to trade though and are 2% lower. Philadelphia SE Semiconductor Index fell 5.41% overnight and now trades down almost 14% since the July highs.
• Australian equities are lower today, tech stocks fell inline with global peers but due to the large exposure to resources rather than tech, the ASX 200 is down just 1.10%. New Zealand equities fell 0.90%.
• In EM Asia all markets are lower with Singapore's Straits Times down 0.80%, Malaysia's KLCI down 0.25%, Indonesia's JCI down 0.55%, Philippines PSEi is down 1.10% while India's Nifty 50 fell 0.50%