ASIA MARKETS: Japan's Nikkei Slides The Most In 8 Months As Tech Selloff Continues Across Asia

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12/06/2017 | 10:39 am

By Kenan Machado

Nikkei down as yen gains; Australia's top mining companies slump

Asia-Pacific stocks continued their descent Wednesday after the S&P 500's first three-day losing streak since August, with shares of technology and commodity-linked companies leading declines

Tech stocks were key to Tuesday's weakness in Asia and the up-to-3% overnight slide in metals prices added to pressure on Wednesday.

Japan's Nikkei ended the session 2% lower, suffering its biggest one-day percentage slide since March 22, on weakness in commodity and tech stocks and yen gains. The U.S. dollar slid to Yen112.16 from Yen112.60 in late New York trade on Tuesday.

Stocks also lagged in China, where the Shanghai Composite fell 0.3%.

Australia's S&P/ASX 200 closed 0.4% lower, led lower by declines for big miners Rio Tinto (>> Rio Tinto plc) (>> Rio Tinto plc) , down 2.5%, and BHP Billiton (>> BHP Billiton Limited) (>> BHP Billiton Plc) , down 2%.

Broadly speaking, "we are starting to see a little bit of diversification outside of the highly concentrated names" as the year draws to an end, said Paul Kitney, chief equity strategist for Asia Pacific at Daiwa Capital Markets.

He said the recent pullback in some hot areas, notably tech, was healthy and it isn't a sign that things have changed fundamentally. "The mind-set now is so used to low volatility that a healthy correction of 2% to 3% is making people talk about it."

But the tech sector isn't out of the woods. In Tokyo, Apple vendor Alps Electric (>> Alps Electric Co Ltd) fell 3.2%. Meanwhile, the tech-heavy Taiex index in Taiwan dropped 1.6% to a more-than two-month low and Korea's Kospi slumped 1.4%.

Tech companies were also lower in Hong Kong, with AAC Technologies Holdings (>> Aac Technologies Holdings Inc) and Sunny Optical Technology Group (>> Sunny Optical Technology (Group) Co. Ltd) skidding 7.3% and 12.5%, respectively.

Tencent Holdings (>> Tencent Holdings Ltd) ended a volatile day down 2.7%, adding to a substantial pullback over the past two weeks, while Geely Automobile Holdings (>> Geely Automobile Holdings Ltd) slid 8.4%. The Hang Seng ended the day 2.1% lower.

Following tech-driven stock gains this year, investors have become skittish about tax implications from U.S. legislation, said Douglas Morton, head of research for Asia at Northern Trust Capital Markets. But "little has changed fundamentally in our opinion."

Still, there has been caution this week as Republicans continue work on the tax policy.

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