Losses on Wall Street ripple through Asia; stocks slump

A woman walks past an electronic board showing Hong Kong share index outside a bank In Hong Kong, Thursday, Oct. 11, 2018. Asian markets tumbled on Thursday, after Wall Street slumped on a heavy selling of technology and internet stocks. (AP Photo/Kin Cheung)

Asian markets are broadly lower after Wall Street slumped on a heavy selling of technology and internet stocks

SINGAPORE — Asian markets were broadly lower on Thursday after Wall Street slumped on a heavy selling of technology and internet stocks.

Japan's benchmark fell by an unusually wide margin of 3.9 percent and China's main index lost 4.3 percent. Markets in Hong Kong, South Korea, Australia and Southeast Asia recorded similar declines.

Investors are wary of possible further U.S. interest rate hikes. That will raise the cost of corporate borrowing and could drag on economic growth.

The U.S. Federal Reserve recently raised short-term interest rates for the third time this year, with one more expected before the year ends. Strong economic data and a positive outlook from Fed officials have led to a sell-off in U.S. Treasury bonds, particularly longer-term ones, sparking concerns about even higher interest rates.

On Wednesday, President Donald Trump said the Fed "is making a mistake" with its campaign of rate increases. "I think the Fed has gone crazy," he charged.

Stephen Innes of OANDA said that Trump's comments have put pressure on the dollar but "the severity of this equity rout could bring the hawkish Fed narrative into question."

"If the Feds are crazy, this market reaction is bordering on insanity, as so many negative crosscurrents collide that is merely impossible to find a glint of optimism," he added.

Sentiment also has been dampened by the spreading U.S.-Chinese tariff fight over Beijing's technology policy. The International Monetary Fund cut its outlook for global growth this week, citing interest rates and trade tensions.

Tokyo's Nikkei 225 gave up 3.9 percent to 22,591.10 and the Shanghai Composite lost 4.3 percent to 2,607.44. The Kospi in South Korea fell 3.6 percent to 2,148.97. Australia's S&P/ASX 200 slipped 2.4 percent to 5,906.00. Stocks plunged in Taiwan and fell across Southeast Asia.

U.S. stocks slumped on Wednesday as concerns over rising interest rates and trade tensions caused a sell-off in technology and internet stocks. The Dow Jones Industrial Average suffered its worst loss in eight months, falling 3.1 percent to 25,598.74.

The S&P 500 index sank 3.3 percent to 2,785.68. The Nasdaq composite, which has a large contingent of technology stocks, was 4.1 percent lower at 7,422.05. It has fallen 7.5 percent in just five days. The Russell 2000 index of smaller-company stocks shed 2.9 percent, to 1,575.41.

Apple and Amazon, the two most valuable companies in the S&P 500, each had their worst day in 2½ years. Apple slipped by 4.6 percent while Amazon lost 6.2 percent.

Amazon has soared 50 percent this year, but its stock has fallen 14 percent from its all-time high in early September.

Francis Tan, an investment strategist at UOB private bank, believes the markets will likely pick up in the U.S. session. "The valuation of U.S. stocks, especially tech stocks, is still pretty high and there could be some profit taking actions now," Tan explained.

The dollar slipped to 112.17 Japanese yen from 112.27 yen late Wednesday. The euro rose to $1.1566 from $1.1523.

Oil futures fell. U.S. crude gave up $1.27 to $71.90 a barrel. The contract settled at $73.17 in New York. Brent crude, the international standard, dropped $1.58 to $81.51 a barrel.

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AP Business Writer Joe McDonald in Beijing contributed to this report.

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