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Sell-off in technology firms sends Asia markets into reverse

  • Written by AFP
  • Published in Business
  • Read: 638

HONG KONG -- Asian markets reversed early gains Tuesday to sit mostly down in the afternoon as a sell-off in technology shares overshadowed a record close on Wall Street and a rally in energy firms.

After surging on years of low borrowing costs, the tech sector is suffering selling pressure from profit-taking around the world and increasing talk among central banks that the age of cheap money is coming to an end.

With big-name firms such as Apple and Google parent Alphabet suffering in recent weeks, their Asian counterparts are also feeling the pinch.

In Hong Kong internet giant Tencent sank more than four and speaker-maker AAC Technologies dived 2.4 percent, while Tokyo-listed Sony lost 1.7 percent and Sharp dived 1.9 percent. Samsung Electronics retreated 0.5 percent in Seoul.

And those fed through to broader markets, while traders have also been spooked by news that North Korea had tested its first missile that could reach the United States.
    
Tokyo ended down 0.1 percent, Seoul slipped 0.6 percent and Singapore gave back 0.5 percent and Taipei 0.6 percent. Shanghai was off 0.4 percent.
    
Hong Kong plunged 1.5 percent, with Kenny Wen, a strategist at Sun Hung Kai Financial in Hong Kong, telling Bloomberg News: "Many investors were betting 25,500 was the supporting level for the Hang Seng Index and have bought lots of futures on it.
    
"As the index fell below that level this morning, some people got panicked and chose to sell their holdings."
    
However, Sydney ended 1.8 percent higher after a more than two percent dive in the previous two days and as Australia's central bank held off raising interest rates.
    
The losses came despite a positive lead from Wall Street where the Dow chalked up another record high ahead of Independence Day celebrations.

Energy rally
    
Markets reversed early gains that were led by energy firms as oil prices bounced.
    
Crude lost around a fifth of its value between mid-May and mid-June, hitting 10-month lows, as traders fretted that a pick-up in US output was offsetting cuts by OPEC and Russia.
    
But it has recovered around half of those losses in recent weeks as US firms have cut the number of rigs pumping, easing supply glut worries.
    
While both main contracts dipped on Tuesday, regional energy firms tracked the previous day's gains of around two percent on the oil market.
    
PetroChina and CNOOC surged in Hong Kong, while Tokyo-listed Inpex was more than one percent up.
    
However, refiner Idemitsu Kosan plunged more than 11 percent in Japan after saying it plans to raise up to $1.2 billion in a share sale despite opposition from its founding family to a merger with rival Showa Shell Sekiyu K.K. Showa Shell soared more than seven percent.
    
In Sydney, Woodside Petroleum and Rio Tinto jumped.
    
The dollar held up after bouncing Monday from last week's sharp losses thanks to upbeat factory figures. Analysts also suggested central banks were stepping back from hawkish comments indicating monetary tightening.
    
The pound was weighed by below-forecast manufacturing data while European Central Bank officials looked to temper boss Mario Draghi's suggestion of higher interest rates.
    
"We've seen an aggressive pullback from last week's speculative bets fuelled by the hawkish chorus of central bankers," said Stephen Innes, senior trader at OANDA.
    
However, the greenback fell against the yen following North Korea's missile test, the latest provocation to ratchet up tensions over its nuclear weapons ambitions.
    
Investors are awaiting the release Wednesday of minutes from the Federal Reserve's June policy meeting and key US jobs data Friday.
    
In early European trade London fell 0.4 percent while Paris and Frankfurt each shed 0.3 percent.