Asian Stock Markets Under Heavy Pressure
Jakarta, CNBC Indonesia – The Jakarta Composite Index (IHSG) was not alone. Most major Asia-Pacific markets traded in negative territory today, with the heaviest pressure in South Korea and Japan.
According to CNBC data, South Korea’s KOSPI recorded the steepest decline, falling 494.96 points, or 8.24%, to 5,513.85 from its previous close of around 6,008.81. A drop of this magnitude is considered extreme for a major index.
In Japan, the Nikkei 225 fell 3,291 points, or 4.86%, to 64,453.29, from its previous close of around 67,744.29.
Chinese and Hong Kong indices also came under pressure, to varying degrees. The Shenzhen Component fell 337.136 points, or 2.78%, to 11,773.455, the steepest decline among Chinese indices.
Chris Weston, head of research at Pepperstone Group, said Asian markets were facing another difficult trading session. Kospi and Nikkei futures pointed to further weakness in technology shares, he said, as investors focused on flows into leveraged ETFs and credit risks associated with building artificial intelligence (AI) infrastructure.
Technology shares were particularly affected, as they are sensitive to rising borrowing costs. Oracle and CoreWeave were among those under pressure. The prospect of higher interest rates has also heightened investor concerns about financing AI businesses and the timing of initial public offerings (IPOs).
JPMorgan analysts said higher-than-expected inflation had initially triggered the sell-off in US equities. However, technology shares were the main driver of the decline, with investors still concerned about funding risks and the IPO schedules of AI companies.
The US consumer price index (CPI) data raised expectations that the Federal Reserve would increase interest rates over the coming year, potentially even at this month’s meeting. According to CME Group’s FedWatch tool, markets are now pricing in a 31.6% probability of a 25-basis-point rate rise at the Federal Reserve’s 28 October meeting, up from 22.1% the previous day.