Asian stock markets experienced significant declines on Friday, reflecting the negative sentiment from global markets. Concerns over global economic growth surged following disappointing economic data from the U.S., Europe, and China, overshadowing any optimism about a potential near-term interest rate cut by the U.S. Federal Reserve. Notably, Asian markets had shown mixed results on Thursday.
U.S. economic data revealed an unexpected contraction in manufacturing activity in July, and first-time unemployment claims reached their highest level in nearly a year.
Investors are now looking forward to the U.S. Labor Department's July employment report.
The Australian stock market saw a sharp decline on Friday, erasing gains from the past two sessions. Influenced by negative global cues, the S&P/ASX 200 fell by 2 percent to well below the 8,000 mark from recent all-time highs. Weakness spanned across most sectors, with significant declines in mining, energy, and financial stocks. This drop followed weak economic data from the U.S., Europe, and China.
Specifically, the S&P/ASX 200 Index dropped by 175.00 points or 2.16 percent to 7,939.70, after hitting a low of 7,920.00 earlier. The broader All Ordinaries Index also fell 176.10 points or 2.11 percent to 8,167.70. On Thursday, Australian markets had ended modestly higher.
Among the major miners, BHP Group and Fortescue Metals each lost more than 2 percent, while Mineral Resources and Rio Tinto fell almost 2 percent each. In the oil sector, Origin Energy dropped more than 1 percent, Woodside Energy declined by more than 2 percent, Beach Energy slipped over 4 percent, and Santos decreased nearly 2 percent.
In the tech sector, Afterpay owner Block surged almost 8 percent and Appen gained more than 1 percent. However, Zip fell by more than 4 percent, Xero declined by almost 2 percent, and WiseTech Global dropped more than 3 percent.
Among the big four banks, Commonwealth Bank and Westpac each lost nearly 3 percent, National Australia Bank declined more than 3 percent, and ANZ Banking fell over 2 percent. Most gold miners also saw declines: Evolution Mining and Resolute Mining each lost more than 2 percent, while Northern Star Resources dropped over 1 percent. Newmont edged up by 0.2 percent and Gold Road Resources gained more than 1 percent. In the currency market, the Aussie dollar traded at $0.651 on Friday.
The Japanese stock market also continued its downward trajectory on Friday, adding to sharp losses from the previous session. The Nikkei 225 fell by over 4 percent to well below the 36,600 level, with weaknesses across all sectors, particularly among technology and financial stocks. Traders responded to the Bank of Japan's hawkish shift in monetary policy and weak economic data from the U.S., Europe, and China.
The Nikkei 225 Index ended the morning session at 36,261.85, down 1,864.48 points or 4.89 percent, reaching a low of 36,107.29 earlier. Japanese stocks had also closed sharply lower on Thursday.
Market heavyweight SoftBank Group lost nearly 6 percent, and Uniqlo operator Fast Retailing declined by 1.5 percent. Among automakers, Honda dropped over 2 percent, and Toyota fell by more than 2 percent.
In the tech sector, Advantest declined by more than 7 percent, while Tokyo Electron and Screen Holdings dropped over 10 percent each.
Within the banking sector, Mitsubishi UFJ Financial plunged nearly 8 percent, Mizuho Financial dropped almost 7 percent, and Sumitomo Mitsui Financial fell over 7 percent.
Major exporters also saw declines: Mitsubishi Electric dropped nearly 6 percent, Canon lost almost 3 percent, Sony slipped over 5 percent, and Panasonic fell by nearly 1 percent.
Other significant losers included Daiwa Securities, which plummeted over 16 percent, and Socionext, Ebara, Dai-ichi Life, and Isetan Mitsukoshi, each plunging by over 9 percent. Mitsui & Co., AGC, and Mitsui Chemicals also fell by nearly 9 percent each, while Fuji Electric, Lasertec, and Hitachi dropped over 8 percent each, and NEC declined almost 8 percent.
Conversely, NH Foods soared by more than 8 percent, and Konami Group surged nearly 8 percent.In recent economic developments, Japan's monetary base increased by 1.0 percent year-over-year in July, surpassing expectations of a 0.9 percent rise and showing an acceleration from the 0.6 percent growth registered in June, according to the Bank of Japan report released on Friday. The circulation of banknotes decreased by 0.9 percent annually, which included a 1.5 percent reduction in circulating coins. Current account balances saw an annual increase of 1.5 percent, driven by a significant 3.6 percent rise in reserve balances. The adjusted monetary base experienced a 0.8 percent increase, recovering from a 6.5 percent decline in the previous month.
In the currency markets, the U.S. dollar is trading in the upper 149 yen range as of Friday.
Across other Asian markets, Hong Kong, South Korea, and Taiwan experienced significant declines, falling between 1.3 to 2.5 percent each. Additionally, markets in China, New Zealand, Singapore, Malaysia, and Indonesia also saw decreases ranging from 0.4 to 1.1 percent.
On Wall Street, stocks faced a sharp downturn throughout Thursday's trading session, following an initial rally earlier in the day. Major indices exhibited considerable losses, with the tech-heavy Nasdaq plummeting by 405.25 points, or 2.3 percent, to close at 17,194.15. The S&P 500 fell by 75.62 points, or 1.4 percent, ending at 5,446.68, while the Dow Jones Industrial Average dropped by 494.82 points, or 1.2 percent, concluding at 40,347.97.
European markets mirrored this downward trend, with significant declines observed throughout. The U.K.'s FTSE 100 fell by 1.0 percent, whereas the French CAC 40 and the German DAX indices dropped by 2.1 percent and 2.3 percent, respectively.
In the commodities market, crude oil prices eased on Thursday due to concerns surrounding disappointing economic data and its implications for oil demand. West Texas Intermediate (WTI) crude futures for September concluded the day down by $1.60, or approximately 2.05 percent, at $76.31 per barrel.
