Asian Stocks Slump Eases After Growth Worries Trigger Selloff

Asian stocks fell, headed for a third day of losses, as investors sold risk assets amid growing concern over US economic growth, with disappointing data from Japan also weighing on sentiment.

The MSCI Asia Pacific Index slid as much as 2.1% to touch a five-week low before paring most of the loss. Chinese tech stocks including Xiami Corp. and Kuaishou Technology helped the Asian benchmark recoup much of its decline, with a gauge of such stocks in Hong Kong rising for the first time in three days.

“While a general risk-off sentiment from the US equities selloff is bringing its contagion to the world, I am more optimistic on Chinese equities, particularly tech and banks, on the back of the much better valuation that they are trading at,” said Francis Tan, Asia chief strategist at Indosuez Wealth Management.

Japan’s Topix fell after data showed the nation’s economy expanded at a slower pace in the last quarter of 2024 than preliminary figures showed. Key gauges fell more than 1% in other tech-heavy markets including South Korea and Taiwan.

The MSCI Asian benchmark pared much of its decline later in the day as US futures erased losses and stocks in Hong Kong trimmed early drops. Citi strategists upgraded China to overweight while downgrading US equities to neutral from overweight.

Asian stocks have beaten their US peers so far in 2025, thanks largely to a rally in Chinese equities driven by DeepSeek’s recent breakthrough in artificial intelligence and Beijing’s support for the private sector. The MSCI Asia Pacific gauge is up 1.9% this year while the S&P 500 has lost 4.5% during the same period.