Asia report: Markets tumble after Wall Street sell-off

Asia-Pacific markets experienced significant declines on Thursday, mirroring the overnight sell-off on Wall Street.

Investors also digested lower-than-expected GDP numbers out of South Korea, and another rate cut from China’s central bank.

“Most Asian stock markets are experiencing a decline, influenced by the overall negative signals from global markets,” said TickMill market analyst Patrick Munnelly.

“The drop is primarily driven by significant decreases in technology stocks, following the trend of the tech-heavy Nasdaq, after several major US tech companies reported unsatisfactory quarterly results.

“Additionally, investors remain apprehensive due to ongoing worries about the decelerating growth in China, the world's second largest economy.”

Munnelly said continuing from significant declines in the last session, Japanese markets experienced a sharp decrease on Thursday.

“The Nikkei 225 is dropping by almost 3 percent, approaching the 38,000 level, with substantial losses in most sectors driven by leading index companies and technology stocks.”

Markets take a tumble after Wall Street sell-off

Japan's Nikkei 225 led the region's losses, plunging 3.28% to close at 37,869.51, marking the index's seventh consecutive day of losses.

Major Japanese companies saw sharp declines, with Renesas Electronics dropping 13.62%, Hitachi falling 9.42%, and SoftBank Group declining by 9.39%.

The broader Topix index also fell, by 2.98% to 2,709.86.

In China, the Shanghai Composite fell 0.52% to 2,886.74, and the Shenzhen Component decreased by 0.22% to 8,474.70.

Notable declines in Shanghai included Guizhou Transportation Planning Survey & Design, which plummeted 10.04%, Harson Trading China dropping 10.01%, and Shanghai Kai Kai Industry falling 9.76%.

The sell-off came despite the People's Bank of China cutting the medium-term lending facility rate in a bid to stimulate the economy.

Hong Kong's Hang Seng Index dropped 1.77% to 17,004.97, with significant losses from Meituan, which fell 5.47%, Zijin Mining Group at 5.1%, and China Unicom Hong Kong at 4.42%.

South Korea's Kospi declined by 1.74% to 2,710.65, following underwhelming GDP growth figures.

SK Hynix saw a substantial drop of 8.87%, while Doosan Robotics and Doosan Bobcat fell by 8.02% and 6.16%, respectively.

Australia's S&P/ASX 200 fell 1.29% to 7,861.20, with Block declining 6.73%, Emerald Resources down 5.68%, and Fortescue losing 5.54%.

New Zealand's S&P/NZX 50 decreased by 1.08% to 12,396.27.

Mainfreight led the losses with an 8.13% decline, followed by Fletcher Building at 4.76% and Serko at 3.95%.

In currency markets, the dollar was last down 1.07% on the yen to trade at JPY 152.24, but it strengthened against the Aussie and Kiwi, rising 0.91% on the former to AUD 1.5332 and advancing 0.43% against the latter to change hands at NZD 1.6935.

Oil prices saw declines, with Brent crude futures dropping 1.75% on ICE to $80.28 per barrel, and the NYMEX quote for West Texas Intermediate falling 1.78% to $76.21.

South Korean economic growth comes in below expectations

In economic news, investors were examining South Korea's second-quarter GDP figures, which came in slightly below expectations.

The country's GDP grew 2.3% year on year, falling short of the 2.5% forecasted by economists polled by Reuters.

On a quarter-on-quarter basis, South Korea's economy contracted by 0.2%, contrary to the anticipated 0.1% increase and a significant downturn from the 1.3% growth seen in the first quarter.

In China, the central bank reduced the medium-term facility lending rate from 2.5% to 2.3%.

The move followed a recent cut in loan prime rates, as part of the government's ongoing efforts to stimulate the slowing economy.

Meanwhile, in Japan, the Bank of Japan was reportedly considering a rate hike in its upcoming monetary policy meeting scheduled for 30 and 31 July.

According to Reuters, the discussion would also include plans to halve its bond-buying programme.

Additionally, a Japanese government panel agreed to raise the average minimum hourly wage to JPY 1,054 - an increase of 5%, according to reports by NHK.

The wage hike could provide the Bank of Japan with more flexibility to consider a rate increase, having recently said it was relying on a “virtuous cycle” of rising wages and prices to sustain economic growth.

Reporting by Josh White for Sharecast.com.