Asian markets fell in early trading Thursday, following Wall Street’s worst day of the year amid signals of recession.
The yield on the closely watched 10-year Treasury fell so low Wednesday that, for the first time since 2007, it briefly crossed a threshold that has correctly predicted many past recessions. Weak economic data from Germany and China added to recent signals of a global slowdown.
That spooked investors, who responded by dumping stocks, sending the Dow Jones Industrial Average DJIA, -3.05% into an 800-point skid, its biggest drop of the year. The S&P 500 index SPX, -2.93% dropped nearly 3% as the market erased all of its gains from a rally the day before. Tech stocks and banks led the broad sell-off.
On Thursday, the U.S. 30-year bond yield TMUBMUSD30Y, -2.16% — which hit an all-time low Wednesday — dropped further in Asian trading, falling below the 2% level for the first time. Meanwhile, China’s central bank set the daily midpoint of the yuan at 7.0268 per U.S. dollar, the sixth consecutive session below the 7 level.
Japan’s Nikkei NIK, -1.21% dropped 1.2% while Hong Kong’s Hang Seng Index HSI, +0.28% was last in positive territory after sharply recovering from early losses. The Shanghai Composite SHCOMP, -0.65% fell 0.8% while the smaller-cap Shenzhen Composite 399106, -0.81% slipped 1%. Benchmark indexes in Taiwan Y9999, -0.92% , Singapore STI, -1.12% and Indonesia JAKIDX, -0.68% all retreated, and Australia’s S&P/ASX 200 XJO, -2.24% slumped 2.2%. South Korea’s Kospi was closed for a holiday.
Among individual stocks, SoftBank 9984, -2.18% sank in Tokyo trading, along with Toyota 7203, -1.09% , Nintendo 7974, -1.25% and Inpex 1605, -2.39% . In Hong Kong, real-estate stocks such as New World Development 17, +4.95% rose, while food processor WH Group 288, -2.83% and tech giant Tencent 700, -2.35% fell. Largan Precision 3008, -1.04% slipped in Taiwan, and Beach Energy BPT, -5.37% , BHP BHP, -2.32% and Westpac WBC, -2.59% dropped in Australia.
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