After a rough day on Wall Street yesterday, Asia-Pacific markets were a sea of red overnight with the Nikkei 225 (^N225) slumping 4.2% on the day in Japan, and the Hang Seng (^HSI) down 1.1% in Hong Kong.
The Shanghai Composite (000001.SS) was 0.7% down by the end of the session after a private survey showed services activity in China expanded less than expected.
Shares of Asian chipmakers tumbled amid renewed concerns over the artificial intelligence frenzy, bringing a regional equity benchmark down more than 2%. Chip giants Taiwan Semiconductor Manufacturing Co (TSM) and SK Hynix Inc (000660.KS) fell at least 4% each.
It came as all three major indexes on Wall Street suffered their biggest daily declines since 5 August due weak US manufacturing data.
The Institute for Supply Management’s monthly factory survey showed that manufacturing contracted at a moderate pace in August, with new orders, production output and employment levels falling.
That added to an already-weak sentiment in Asia, where a run of disappointing Chinese data had been hurting risk assets.
The Dow Jones (^DJI) fell 1.5% to 40,936.93; the S&P 500 (^GSPC) lost 2.1% to 5,528.93 and the Nasdaq (^IXIC) lost 3.3% to close at 17,136.30.
MSCI’s gauge of stocks across the globe fell 1.63%, also showing its biggest one-day drop since 5 August.
In the bond market, the yield on benchmark US 10-year notes fell to 3.85%, from 3.91% late on Friday.
Treasury yields steadied after a tumble Tuesday. A dollar gauge snapped a five-day winning streak, its longest since April. The yen edged higher. Oil pushed lower after a decline of almost 5% on Tuesday amid weak demand and oversupply concerns.