news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

China Fund News Taylor

Brothers and sisters, today the stock market encountered Black Friday. The US stock market plummeted in the early morning, and the Asia-Pacific market collapsed during the day. We witnessed history again! Let's take a look at what happened.

A shares fell

The three major indexes fluctuated and adjusted today, and all fell by more than 1% at one point in the late trading. As of the close, the Shanghai Composite Index fell 0.92%, the Shenzhen Component Index fell 1.38%, and the ChiNext Index fell 1.66%.

A total of 995 stocks in the market rose, 57 stocks hit the daily limit, and 4,193 stocks fell.

Pharmaceutical stocks bucked the trend and many stocks hit their daily limit.

The concepts of commercial spaceflight and low-altitude economy are repeatedly active!

Communication equipment and semiconductor chips saw the largest declines!

The RMB exchange rate suddenly soared!

Asia-Pacific markets collapsed across the board

Last night, Wall Street sold off U.S. stocks violently, with the Dow Jones Industrial Average plunging nearly 500 points and the Nasdaq plunging more than 2%, which directly led to a decline in most Asia-Pacific stock markets today.

Japanese stocks plunged on expectations of further monetary tightening, which weighs on Japan's export-oriented economy and further exacerbated market sentiment.

The Nikkei 225 Index fell below 36,000 points, a drop of nearly 6%; the Topix Index fell 6.1%, the largest single-day drop since 2016! The Korean Composite Index fell nearly 4%, and the stock index in Taiwan fell more than 4%!

So, what happened behind the scenes?

Some analysts said that in the United States, new economic data has raised concerns about a possible recession and concerns that it may be too late for the Federal Reserve to cut interest rates. In addition, as tensions in the Middle East intensify, investors are deterred by overvalued valuations.

The latest data released by the United States last night showed that the number of first-time unemployment claims hit the largest increase since August 2023. The ISM manufacturing index, which measures U.S. factory activity, was 46.8%, lower than expected, indicating economic contraction. The ISM manufacturing PMI in July has been in the contraction range for four consecutive months; the Markit manufacturing PMI in July also slipped into the contraction range. Both point to the continued weakness of the U.S. manufacturing industry and send a signal of economic slowdown.

Data showing weekly U.S. jobless claims hit a near one-year high while the manufacturing sector contracted stoked broader risk aversion.

In addition, industry giants such as Intel Corp. and Amazon.com Inc. reported disappointing earnings outlooks or results.

Intel's U.S. shares fell more than 20% after the market closed. The company said sales for the current quarter will reach $12.5 billion to $13.5 billion, while analysts' average forecast was $14.38 billion. Intel said it plans to lay off more than 15% of its approximately 110,000 employees. The statement said the company will also suspend dividend payments to shareholders starting in the fourth quarter and will continue to suspend until "cash flow improves to a sustainable higher level." The company has been paying dividends since 1992, and this is the first time it has suspended dividends in the last 32 years. Intel has dominated the semiconductor industry for decades and is now forced to publicize cost-cutting measures and guarantee that it can fund its growth plans.

Amazon's US stock fell more than 6% after the market closed. Although the company's second quarter profit exceeded expectations, the company's profit growth rate slowed significantly compared with previous quarters, and the forecast for next quarter's operating profit was significantly lower than analysts' average expectations. E-commerce business revenue was under pressure, seller service and advertising revenue were lower than expected, and the online retail business faced fierce competition from Temu and Shein; at the same time, the company increased its investment in AWS, and the huge capital expenditure began to worry investors, and the expensive AI capital expenditure and service fees prolonged the return cycle.

“The recent strength of the yen, coupled with weakness in the technology sector, is bound to have a significant impact on Asian equities,” said Manish Bhargava, a fund manager at Straits Investment Holdings in Singapore. “The yen’s strength is particularly bad for Japanese exporters as it erodes the value of their overseas earnings.”

“I didn’t expect the stock market to fall so much,” said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Asset Management in Tokyo. “It’s probably because people are worried that the U.S. economy will collapse dramatically, which is the most unpleasant mode for Japanese stocks.”