Asia report: Tech stocks lead most markets lower

16th Oct 2024 11:11

(Sharecast News) - Asia-Pacific markets faced broad declines on Wednesday, with Japan's Nikkei 225 leading the losses amid heightened investor caution.

Patrick Munnelly at TickMill said some traders were taking profits after recent gains, while concerns over tensions in the Middle East and China's drills around Taiwan also weighed on sentiment.

"While expectations for a 50 basis point rate cut by the US Fed next month have faded, there is still optimism the central bank will cut rates by 25 basis points.

"Chip stocks worldwide plummeted after ASML, the leading chipmaking equipment manufacturer, forecast weak 2025 sales and noted that while AI-related chips are thriving, other semiconductor market segments are not, causing many of its customers to be cautious.

"ASML's gloomy outlook prompted a series of chip stock sell-offs across Europe, the US, and Asia."

Most markets in the red amid tech sector concerns

In Japan, the Nikkei 225 dropped 1.83% to 39,180.30, while the broader Topix fell 1.21% to 2,690.66.

Technology firms were among the worst performers, with Lasertec plunging 13.44%, followed by Dainippon Screen Manufacturing and Tokyo Electron, which shed 9.34% and 9.19%, respectively.

The drop in Japan followed a weak lead from Wall Street, where concerns about rising bond yields and a slowing global economy weighed on sentiment.

China's markets were mixed, as investors awaited potential stimulus measures from the government.

The Shanghai Composite eked out a 0.05% gain to close at 3,202.95, while the Shenzhen Component dropped 1.01% to 9,965.02.

Strong performances from Chinese steelmakers and property developers helped offset broader losses.

Chongqing Iron & Steel surged 10.4%, while Gemdale Corporation and Sunway both gained 10.06%.

Hong Kong's Hang Seng Index dipped slightly by 0.16% to 20,286.85, led by declines in major tech and entertainment stocks.

JD Health International fell 4.11%, while Galaxy Entertainment Group and Sunny Optical Technology dropped 4.05% and 3.89%, respectively.

South Korea's Kospi 100 lost 1.06% to close at 2,619.32, with energy and construction firms bearing the brunt of the selloff.

Kogas fell 4.46%, followed by Samsung Engineering and Hanwha Solutions, which declined 4.38% and 4.17%.

In Australia, the S&P/ASX 200 slipped 0.41% to 8,284.70.

Technology and education stocks led the losses, with NUIX dropping 5.36%, Summerset Group falling 5.14%, and IDP Education down 5.04%.

New Zealand's S&P/NZX 50 shed 1.55% to 12,641.32, with Eroad leading the declines, down 6%.

The A2 Milk Company and KMD Brands also posted significant losses, falling 4.11% and 4.08%, respectively.

In currency markets, the dollar was last up 0.04% on the yen to trade at JPY 149.26, while it added 0.27% against the Aussie to AUD 1.4959, and advanced 0.18% on the Kiwi, changing hands at NZD 1.6469.

Oil prices eased slightly, with Brent crude futures last down 0.23% on ICE at $74.08 per barrel, and the NYMEX quote for West Texas Intermediate slipping 0.17% to $70.46.

Consumer inflation meets expectations in NZ, unemployment rises in South Korea

In economic news, New Zealand's consumer price index rose 2.2% year-on-year in the third quarter, matching economists' expectations.

On a quarterly basis, inflation increased 0.6%, slightly below the 0.7% forecast in a Reuters poll.

The data suggested inflationary pressures remained steady, though the slower quarterly growth may indicate some easing.

South Korea's unemployment rate meanwhile inched up to 2.5% in September from 2.4% in August, according to seasonally adjusted figures.

Although still low, the slight increase reflected ongoing challenges in the labour market amid slowing global demand and economic uncertainties.

In Japan, private-sector machinery orders for August saw a significant decline, falling 3.4% year-on-year, a sharp contrast to expectations of a 3.6% rise.

The data, which excluded shipbuilding and power companies, also showed a 1.9% month-on-month decrease, worse than the 0.1% drop economists had predicted, signalling potential weaknesses in capital investment.

In Hong Kong, the city's chief executive John Lee outlined new policies in his annual address, emphasising government efforts to improve public services and economic competitiveness.

Lee pledged to reduce waiting times for public housing and to simplify procedures for companies seeking to list on Hong Kong's stock exchange, aiming to attract more international businesses to the city.

Reporting by Josh White for Sharecast.com.