Asia-Pacific markets experienced a general decline on Thursday, mirroring a downturn on Wall Street. The slump was attributed to escalating geopolitical tensions and critical remarks from U.S. President Donald Trump concerning defense companies and a significant drop in oil prices.
Trump’s Impact on Defense Firms
U.S. defense stocks faced pressure after President Trump declared he would “not permit” these companies to issue dividends or conduct stock buybacks until they addressed his concerns. These concerns reportedly include executive compensation packages and production-related issues within the industry.
Oil Price Slide and Supply Concerns
Oil prices dropped significantly overnight following President Trump’s announcement that Venezuela’s interim authorities would supply up to 50 million barrels of crude to the U.S. This news raised fears of an increased global oil supply. Brent crude futures fell by 0.51% to $60.39 a barrel, while U.S. West Texas Intermediate crude saw a slight increase of 0.61% to $56.33 per barrel, as of early morning Singapore time.
Regional Market Performance
Japan’s Nikkei 225 index retreated by 1.63%, dragged down by losses in the basic materials and technology sectors. Major decliners included SoftBank, which plunged 7.59%, and Tokyo Electron, a key supplier to chip manufacturers, which fell 4.01%. The broader Topix index was down 0.77%.
South Korea’s Kospi managed to stay slightly above the flatline, closing at 4,552.37, while the smaller Kosdaq index declined by 0.35%.
Australia’s S&P/ASX 200 bucked the trend, closing 0.29% higher at 8,720.8. However, shares of BlueScope Steel fell 1.57% after the company rejected a substantial takeover bid.
Hong Kong’s Hang Seng Index declined by 1.59%, with basic materials and technology stocks leading the losses. Companies like Lenovo Group, Kuaishou Technology, and Baidu experienced significant drops. In contrast, Knowledge Atlas Technology JSC, also known as Zhipu, saw its shares surge up to 15% on its Hong Kong debut following a successful $558 million initial public offering.
India’s Nifty 50 fell 0.83%, and the BSE Sensex index was down 0.63%.
U.S. Market Reaction
U.S. equity futures showed little change in early Asian trading hours. This followed a day where the S&P 500 and the Dow Jones Industrial Average ended their three-day winning streaks. The S&P 500 shed approximately 0.3%, while the Dow fell by about 0.9%. The tech-heavy Nasdaq Composite, however, gained nearly 0.2%, boosted by a 2.4% rise in Alphabet, whose market capitalization briefly surpassed Apple’s.