Investing.com– Asian stocks fell sharply on Thursday, tracking an overnight rout on Wall Street as weak earnings from major technology companies drove outsized losses in the sector.
Weak sentiment towards China also remained in play, with the country’s stock benchmarks testing their lowest levels since February.
Wall Street indexes tumbled in overnight trade, with the plummeting over 3% as middling earnings from Alphabet Inc (NASDAQ:) and Tesla Inc (NASDAQ:) sparked an extended rout in tech.
But U.S. stock index futures rose marginally in Asian trade, suggesting that Wall Street may at least be stabilizing from recent losses. Focus was also on upcoming and data due in the coming days.
Asian tech tracks Wall St slide, strong earnings disregarded
Tech-heavy Asian bourses were by far the worst performers on Thursday, with Japan’s losing 2.7%, while South Korea’s slid 1.8%. The was also dented by weaker-than-expected gross domestic product data for the second quarter.
Memory chip making giant SK Hynix Inc (KS:) tumbled nearly 9%, even as it clocked stronger-than-expected quarterly earnings on robust artificial intelligence demand.
Hong Kong’s index tumbled 1.8%, as Chinese internet giants tracked losses in their U.S. peers.
Alphabet headlined these losses, even as the firm’s quarterly earnings beat consensus. But signs of slowing advertising revenue and increased costs, especially on AI, drove concerns over other tech earnings reflecting similar trends.
The tech sector was already nursing steep losses over the past week, as it was slammed by profit-taking after a major melt-up over the past year. Expectations of interest rate cuts, specifically in the U.S., also sparked a rotation into more economically sensitive sectors.
Japan, Australia and India see profit-taking from record highs
Broader Asian markets also slid, as risk appetite was hammered by the tech rout. Australia’s index fell 1.2%, while Japan’s broader index lost 2.2%. Both indexes had surged to record highs earlier in July.
for India’s index fell 0.3%, pointing to a negative open as the index also grappled with a high degree of profit-taking in recent sessions. The Nifty and India’s had notched a series of record peaks in July, but were now set to pull back substantially from those levels.
Chinese stocks test five-month lows
China’s and indexes fell relatively less than their Asian peers, owing to lower tech weightage in both indexes. But they were both down around 0.7%, and were also at their weakest levels since late-February.
Chinese markets were nursing steep losses as a swathe of weak economic readings battered sentiment towards the country. The Chinese economy grew less than expected in the second quarter.
Surprise interest rate cuts in the country also did little to improve sentiment. Reports on Thursday showed that several state-owned Chinese banks had lowered borrowing costs following a surprise reduction in the loan prime rate earlier this week.
