Investing.com– Most Asian stocks sank on Wednesday as a devastating earthquake in Taiwan dented risk appetite, while uncertainty over the path of U.S. interest rates also spurred extended profit-taking in the region.

Regional stocks took a weak lead-in from Wall Street, as U.S. stock indexes tumbled from near record highs in the first two trading days of the second quarter. U.S. stock futures steadied in Asian trade.

But concerns over the full impact of the Taiwan earthquake, which rocked the island state on Wednesday morning, were a key point of contention for Asian markets.

Taiwan earthquake dents local stocks

Taiwan’s benchmark index fell 0.8% on Wednesday, amid broad-based losses as sentiment was battered by a 7.5 magnitude quake in the country.

The earthquake was the strongest to hit the island since 1999, and was seen wiping out power to several homes, destroying public infrastructure and also disrupting public transport across the island.

Major chipmaker and index heavyweight TSMC (TW:) reportedly suspended production at its local factories and also evacuated staff in some areas. Shares of the firm, which is by far Taiwan’s most valuable company, fell more than 1% on Wednesday.

Broader Asian markets fall amid rate uncertainty

In addition to concerns over Taiwan, sentiment towards broader Asian markets was also hit by growing uncertainty over just when the Federal Reserve will begin cutting interest rates, especially ahead of key data due this Friday. 

This uncertainty spurred a measure of profit-taking in markets that had a strong run-up in the first quarter of 2024. Japan’s index fell 0.5%, retreating further from record highs hit in March. Tsunami warnings were also issued in parts of Japan following the Taiwan earthquake, particularly in Okinawa. 

Australia’s slid 1.3%, also falling sharply from recent record highs, while steep losses in technology stocks dragged South Korea’s down 1.4%.

China’s and indexes fell 0.5% each, shrugging off the results of a private survey showing that the country’s grew as expected in March.

Official data released last week also showed China’s manufacturing sector returned to expansion in March, potentially heralding some recovery in the country’s economy after a year of laggard growth. 

Hong Kong’s index slid 1.2%, weighed by losses in major new energy vehicle stocks, which followed a steep fall in EV giant Tesla Inc (NASDAQ:), after the firm clocked disappointing deliveries for the first quarter. 

Elsewhere, for India’s index pointed to a weak open, with the index likely to track weakness in its broader Asian peers. A this Friday was also in focus.





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