STOCKS

Asia tech firms lead losses as regional markets tumble

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HONG KONG: Technology firms across Asia tumbled on Thursday, dragging markets across the region into the red, following sharp losses on major US firms including Apple and Netflix.

The retreat is the latest to hit Asia as investors fret over a recent rally that has sent several indexes to record highs, though a surprise jump in a gauge of Chinese factory activity provided some support to Shanghai.

While Wall Street saw the Dow chalk up a fresh record following strong US economic growth figures, the Nasdaq took a hammering with analysts pointing to a technical shift ahead of a Senate debate on tax cuts this week.

“The prospect of US tax cuts actually being passed appears to have prompted a value rotation away from the FANG stocks and the tech-heavy Nasdaq and back toward financials and other sectors of the market that will benefit if the tax bill does indeed pass into law,” said Greg McKenna, chief market strategist at AxiTrader.


FANG refers to tech titans Facebook, Apple, Netflix and Google—which now trades as Alphabet—that have been at the forefront of a market surge in the sector this year.

The selling flooded through to Asia, where Samsung dived almost three percent and Sony lost more than two percent while Tencent —which recently joined the $500 billion market value club—was down nearly almost as much.

On broader markets Hong Kong was down 1.1 percent and Tokyo ended the morning 0.1 percent lower.

Seoul eased 0.7 percent after the Bank of Korea hiked interest rates for the first time in six years citing a continued improvement in the economy and despite concerns about an increasingly belligerent North.

The move has fuelled speculation it could spark a broad move across Asia’s central banks to lift rates as they try to avoid capital outflows with the US Federal Reserve on course to tighten policy.

Shanghai was flat, paring earlier sharp losses, after data showed activity in China’s manufacturing sector smashed forecasts, providing optimism about the world’s number two economy after a series of disappointing readings.

Sydney was off 0.7 percent after news that an independent inquiry into Australia’s financial services sector had been set up in a bid to quell public anger at the massively profitable banking system following a series of scandals. The country’s “big four” lenders—ANZ, Commonwealth, NAB and Westpac—were all down.

On currency markets the pound extended its rally against the dollar following reports British and European Union negotiators were close to a divorce settlement deal.

The dollar was up, however, against the yen as news that the US economy had enjoyed its best growth in three years reignited hopes for higher US borrowing costs over the next year.

Bitcoin was holding above the $10,000 mark it broke for the first time Wednesday, but is well down from the record $11,434 it touched briefly in US trade.

 

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