Markets Concerns about the US economy cause share prices in Asia to plummet

The sell-off on the Asian stock markets continued at the start of the new trading week. Concerns about a possible hard landing for the US economy also spooked investors on Monday.

In addition, technology stocks suffered from a report that chip manufacturer Nvidia is postponing the launch of new AI chips due to so-called design flaws. As a major beneficiary of artificial intelligence, Nvidia was recently the driving force behind the general stock market rally.

Investors made further gains, particularly in Japan. The leading Nikkei 225 index fell by 12.4 percent to 31,458.42 points. This was the lowest level since November 2023.

Trading was temporarily interrupted due to the sharp price swings. Because the Nikkei has now lost more than 20 percent from its recent record high, stock market analysts are talking about a bear market.

After a month-long price rally in Japan, the Nikkei 225 reached a high of just over 42,400 points in mid-July. However, the national currency, the yen, then experienced a sharp rise within a short period of time, which weighed heavily on the share prices of export-dependent Japanese companies. Against the US dollar, for example, the yen fell to its lowest level since the beginning of the year on Monday.

Panic with a view to the US economy

Commerzbank's foreign exchange experts spoke of "panic on the market with regard to the US economy". The global share indices are risk averse and are selling shares. With regard to the USA, the question is whether a recession can be avoided in view of the recent weak economic data and an "unprecedented cycle of interest rate hikes".

The Chinese stock markets held up better than the Japanese indices. The Hang Seng Index of the Hong Kong Special Administrative Region recently fell by 2.7 percent to 16,494 points. The CSI 300, which includes the 300 most important shares on the Chinese mainland stock exchanges, held up slightly better, falling 1 percent to 3351 points. However, both indices had already lost considerable ground in recent weeks.

The Australian stock exchange was also unable to escape the weak conditions. The S&P/ASX 200 slipped by 3.7 percent to 7,649.60 points.