Hong Kong stocks sucked into Asian rout on US recession fears; Japan index dives record 12%
- Jefferies strategist Chris Wood now expects the US Federal Reserve to make an intra-meeting interest rate cut – a rare move reserved for emergencies
The Hong Kong benchmark slumped to a three-month low and Japan’s equity gauge suffering its biggest-ever decline, with the MSCI Asia-Pacific Index plunging by as much as 6.7 per cent, its worst performance since October 2008. The gauge was also set to enter a technical correction after a 10 per cent from a recent high and erased all the gains for the year.
The Hang Seng Index dropped 1.5 per cent to 16,698.36 at the close, its lowest since April 22. The Hang Seng Tech Index lost 1.4 per cent and the Shanghai Composite Index slipped 1.5 per cent.
Japan led the meltdown in the region, with the Nikkei 225 plunging a record 12.4 per cent that triggered a circuit breaker on both stocks and index futures as investors grappled with the fallout of the central bank’s surprise hawkish pivot.
The Bank of Japan last week raised interest rates for the second time in 17 years, with talk of another rate stoking the yen further.
Benchmarks in South Korea and Taiwan slumped more than 6 per cent and Australia’s S&P/ASX 200 lost almost 4 per cent.