Asian financial markets displayed a mixed performance on Thursday, struggling for clear direction after a sharp sell-off on Wall Street overnight reignited concerns about global economic growth and the impact of US trade policies.
While some regional bourses managed gains, others faltered under the weight of investor apprehension.
Powell’s cautionary tone sets market mood
The downturn in sentiment was largely attributed to remarks from US Federal Reserve Chair Jerome Powell.
Speaking on Wednesday, Powell offered a cautious assessment, warning that President Donald Trump’s ongoing tariff strategies posed risks to the central bank’s dual mandate, potentially pushing both inflation and employment further from desired levels.
Crucially, he also indicated that the Fed would adopt a patient stance, awaiting more definitive economic data before considering any adjustments to interest rates.
These comments appeared to cool expectations for imminent rate cuts and heightened worries about the economic trajectory.
Wall Street tumbles on growth fears
Reacting to Powell’s remarks and broader economic unease, the US stock market experienced a significant decline on Wednesday. Selling pressure was widespread across sectors.
The Dow Jones Industrial Average plummeted 699.57 points, a drop of 1.73%, to close at 39,669.39.
The S&P 500 suffered an even steeper percentage loss, shedding 120.93 points, or 2.24%, to settle at 5,275.70.
The technology-heavy Nasdaq Composite bore the brunt of the sell-off, tumbling 516.01 points, or 3.07%, to end the session at 16,307.16.
Market breadth data underscored the pervasive weakness.
According to Reuters, declining issues significantly outnumbered advancing ones on both major exchanges, with a ratio of 1.58-to-1 on the NYSE and a more pronounced 2.02-to-1 on the Nasdaq.
Asia navigates mixed currents
Reflecting this uneasy global backdrop, Asian markets showed regional divergence on Thursday morning.
Japan’s Nikkei 225 managed to open higher, gaining 0.59%, while the broader Topix index added 0.26%.
South Korea also saw positive momentum, with the Kospi index rising 0.41% and the small-cap Kosdaq rallying a stronger 1.02%.
Australia’s S&P/ASX 200 posted modest gains of 0.18% in early trade.
However, futures contracts for Hong Kong’s Hang Seng index signaled a weaker start, suggesting that concerns remained prominent in key regional hubs.
Indian equities brace for softer open, potential profit-taking
Following the sharp overnight decline in the US and the mixed signals from Asia, the Indian stock market is poised for a lower opening on Thursday.
Trends on the Gift Nifty platform indicated negative pressure building for the domestic benchmark indices, the Sensex and Nifty 50.
Adding to the headwinds, analysts anticipate potential profit-booking activity after Indian equities enjoyed a strong rally over the preceding three consecutive sessions.
This confluence of cautious global sentiment and potential domestic selling could weigh on the market at the start of the trading day.
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