Asia report: Most markets fall on fresh geopolitical concerns

Asia-Pacific markets experienced a mostly negative performance on Thursday, driven by a significant drop in chip-related stocks following reports of the US implementing stricter export restrictions.

Adding to the market jitters were comments from former US president Donald Trump, heightening geopolitical tensions.

That led to shares of TSMC, the world’s largest chip maker, falling more than 2.4% in Taiwan, leading to a 1.56% decline in the Taiwan Weighted Index.

“On Thursday, Asian stocks experienced a decline, driven by a widespread sell-off in the technology sector amid concerns over potential tightening of US restrictions on chip sales to China,” said TickMill market analyst Patrick Munnelly.

“The region saw significant losses in Japanese and South Korean stocks, with the Topix index dropping by as much as 1.5%.”

Munnelly noted that Tokyo Electron was particularly hard hit for the second consecutive day, experiencing an approximate 11% decline, while Taiwan Semiconductor Manufacturing also dropped.

“Meanwhile, the performance of Hong Kong and mainland Chinese stocks was mixed, as US futures showed a slight increase.”

Most markets fall across the Asia-Pacific region

In Japan, the Nikkei 225 tumbled by 2.36% to 40,126.35, while the Topix fell by 1.6% to 2,868.63.

Major losses were seen in tech stocks on Tokyo’s benchmark, with Tokyo Electron dropping 8.75%, Dainippon Screen Manufacturing down 8.41%, and Hoya falling 7.49%.

Conversely, Chinese markets posted gains, as the Shanghai Composite rose by 0.48% to 2,977.13, and the Shenzhen Component increased by 0.5% to 8,879.33.

Significant gains were seen in Shanghai in stocks like Xining Special Steel, which surged 10.21%, Heilongjiang Transport Development up 10.13%, and Shanghai Jiao Yun Group increasing by 10.08%.

The Hang Seng Index in Hong Kong saw a modest increase of 0.22% to 17,778.41.

Leading the gains in the special administrative region were Nongfu Spring, up 6.48%, China Hongqiao Group rising 3.55%, and CK Infrastructure Holdings increasing by 2.92%.

South Korea's Kospi index fell 0.67% to 2,824.35, with notable declines including SK Square, which dropped 8.34%, F&F Co down 5.95%, and SK Holdings falling by 4.11%.

Australia’s S&P/ASX 200 dropped by 0.27% to 8,036.50.

Domino's Pizza Enterprises saw a sharp decline of 8.23%, followed by Wisetech Global down 6.32%, and Neuren Pharmaceuticals falling 6.14%.

New Zealand’s S&P/NZX 50 bucked the regional trend, rising by 0.3% to 12,329.44.

Leading gainers in Wellington were KMD Brands up 6.49%, Oceania Healthcare increasing by 5.17%, and Eroad rising by 4.76%.

In currency markets, the dollar was last up 0.17% on the yen to trade at JPY 156.47, while it fell 0.09% against the Aussie to AUD 1.4847, and advanced 0.23% on the Kiwi to last change hands at NZD 1.6478.

On the commodities front, Brent crude futures were last down 0.11% on ICE at $84.99 per barrel, while the NYMEX quote for West Texas Intermediate edged up 0.06% to $82.90.

Japan trade slows down, employment numbers rise in Australia

In economic news, Japan saw a notable slowdown in its trade dynamics in June.

Exports increased 5.4% year-on-year, significantly lower than the 13.5% growth observed in May.

Imports also experienced a deceleration, growing by 3.2% compared to 9.5% in the previous month.

Both figures fell short of Reuters forecasts, which had predicted 6.4% growth in exports and 9.3% in imports.

Despite the slower growth, Japan's trade balance shifted dramatically from a JPY 1.2trn deficit in May to a JPY 224bn surplus in June.

In Australia, employment figures showed positive movement, with the number of employed individuals rising by around 50,000.

However, the number of unemployed also increased by 10,000, according to the Australian Bureau of Statistics.

The participation rate edged up to 66.9%, just shy of the record high of 67% recorded in November of the previous year.

Reporting by Josh White for Sharecast.com.