Asian markets plunge after Wall Street crash

Asian markets posted big early losses on Thursday, after Wall Street suffered one of its worst hits in two years in the previous session.

Downbeat earnings reports from retailers had exacerbated concerns about consumer resilience and corporate profitability on Wednesday, leading to difficult day trading.

On Thursday morning, Hong Kong was down more than three percent, while Tokyo was down about 2.5 percent.

Among the biggest losers in Hong Kong was Chinese tech giant Tencent, whose shares fell more than 8 percent on lackluster first-quarter results.

Elsewhere in the region, Australia posted its lowest jobless rate in 48 years, in a possible boost for Prime Minister Scott Morrison two days before a contested federal election.

The jobless rate fell to 3.9 percent, the official statistics agency said, the lowest rate since 1974.

But shares in Sydney were still down, as were those in Singapore, Shanghai, Seoul and Taipei, although Jakarta was up more than 2 percent.

Stephen Innes of SPI Asset Management called Wednesday’s losses “the most significant daily decline since June 2020.”

“The weakness came as Target’s quarterly earnings added fuel to the recession risk narrative,” he added.

Target, the big North American-focused retailer, tumbled about 25 percent after profit missed expectations despite higher sales.

The company pointed to the impact of higher operating costs on results that echoed those of larger rival Walmart.

Retailers said profits were under pressure and some consumers were avoiding discretionary purchases as prices for food, gasoline and other household essentials rose.

All three major US indices sank, with the Dow sinking more than 1,150 points, or 3.6 percent, and the Nasdaq sinking 4.7 percent.

European stock markets also fell.

“The big drops in these retailers’ shares… highlight the damage that inflation is inflicting on the sector’s profit margins,” said Fawad Razaqzada of City Index.

Shares fell sharply in early Hong Kong trading Shares fell sharply in early Hong Kong trading Photo: AFP/VALLEY OF THE KING

“In addition, consumers are also being pressured and if they start to cut spending now, retailers could suffer even more,” he added.

In some of his most aggressive comments to date, Federal Reserve Chairman Jerome Powell said Tuesday that the US central bank would raise interest rates until there is “clear and convincing” evidence that the inflation is receding.

– Bloomberg News contributed to this report –

Hong Kong – Hang Seng Index: DOWN 3.07 percent to 20,009.68

Shanghai – Composite: DOWN 0.89 percent to 3,058.44

Tokyo – Nikkei 225: DOWN 2.63 percent to 26,202.70 (pause)

North Sea Brent crude: UP 1.08 percent to $110.19 a barrel

West Texas Intermediate: UP 0.62 percent to $110.21 a barrel

Euro/Dollar: LOW to $1.0487 from $1.0533

Pound/Dollar: LOW to $1.2349 from $1.2476

Euro/pound: UP to 84.93 pence from 84.43 pence

New York – Dow Jones: DOWN 3.6 percent to 31,490.07 (close)

London – FTSE 100: DOWN 1.1 percent to 7,438.09 (close)

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